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German Official Floats Google ‘Break-Up’ Idea

A senior German official has warned that Google may have such a dominant market position that a breakup of the company “must be seriously considered.”

Such a move – which would be difficult to enforce because Google is based in the United States – could be a last resort for countries seeking to prevent the Internet search giant from systematically crowding out competitors, said Sigmar Gabriel, who is Germany’s economy minister and vice chancellor.

(Justin Sullivan/Getty Images)G

“A breakup, of the kind that has been carried out for electricity and gas grids, must be seriously considered here,” Gabriel wrote in an op-ed published Friday by German daily Frankfurter Allgemeine Zeitung. “But it can only be a last resort. That’s why we are focusing on anti-trust style regulation of Internet platforms.”

Google has for years faced criticism over its dominant position in Europe, where no serious local rival has emerged to challenge its search business. But Gabriel’s comments reflect a new sense of urgency among European governments and businesses that the continent’s home-grown Internet industry risks being smothered by American rivals.

On Thursday, some 400 companies – including major German and French publishers – announced they were submitting a new anti-trust complaint against Google. The grouping, calling itself Open Internet Project, alleges that Google promotes its own products in search results at the expense of rivals.

Gabriel’s spokesman Stefan Rouenhoff said Friday that the Economy Ministry was examining various aspects of Google’s business, including also its compliance with privacy rules and its use of legal tax-reduction measures that have irked European governments.

He stressed that a breakup of Google and other Internet companies, while legally possible, would be difficult.

“With a breakup of Google the global dimension would naturally raise questions of enforceability,” Rouenhoff told reporters in Berlin. “Such a procedure would take a certain amount of time.”

Rouenhoff indicated that instead of breaking up a company Germany seek to introduce new rules at the level of EU anti-trust regulation requiring companies like Google to guarantee that rivals feature in search results.

The head of Germany’s anti-trust office said there was traditionally a high threshold for proving that a company was exploiting its market position.

“If one wants to proceed with Google and other companies, legislative measures may need to be considered,” Andreas Mundt said.

In his op-ed, Gabriel’s painted an alarming picture of the threat posed to society by Internet companies.

“It’s about nothing less than the future of democracy in the digital age, and therefore also about the freedom, emancipation, participation and self-determination of 500 million people in Europe,” he wrote.

Google dismissed Gabriel’s claim.

“We are surprised by the opinion of the minister of economics that companies like Google would harm users, economy and society,” Philipp Justus, managing director of Google Germany, said in a statement sent to The Associated Press.

“We have been and are always open for conversations about how to make the most of digitization both for the economy and for consumers,” he added.

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