(Adds details of probe, context, lawmakers and industry
By Alexei Oreskovic, Julia Fioretti and Alastair Macdonald
Nov 21 The European Parliament is preparing a
non-binding resolution that proposes splitting Google Inc's
search engine operations in Europe from the rest of
its business as one possible option to rein in the Internet
company's dominance in the search market.
European politicians have grown increasingly concerned about
Google's and other American companies' command of the Internet
industry, and have sought ways to curb their power. A public
call for a break-up would be the most far-reaching action
proposed and a significant threat to Google's business.
The draft motion does not mention Google or any specific
search engine, though Google is by far the dominant provider of
such services in Europe with an estimated 90 percent market
share. Earlier on Friday, the Financial Times described a draft
motion as calling for a break-up of Google.
Google declined to comment.
The motion seen by Reuters "calls on the Commission to
consider proposals with the aim of unbundling search engines
from other commercial services as one potential long-term
solution" to leveling the competitive playing field.
Parliament has no power to initiate legislation and lacks
the authority to break up corporations, and while the draft
motion is a non-binding resolution, it would step up the
pressure on the European Commission to act against Google.
Google already faces stern criticism in Europe about
everything from privacy to tax policies, and has been wrestling
with a European court's ruling that requires it to remove links
from search results that individuals find objectionable.
The company has grown so large as to inspire distrust in
many corners, with a chorus of public criticism from politicians
and business executives.
"It's a strong expression of the fact that things are going
to change," said Gary Reback, a U.S. attorney who has filed
complaints on behalf of companies against Google over fair
search. "The parliament doesn't bind the commission for sure,
but they have to listen."
RESOLUTION "VERY LIKELY" TO BE ADOPTED
Europe's new antitrust chief said she would take some time
to decide on the next step of the four-year investigation into
the Internet search leader, after her predecessor had scrapped a
proposed settlement with the company.
European Competition Commissioner Margrethe Vestager, who
took over from Joaquin Almunia on Nov. 1, said she would take a
representative sample of views from parties involved in the case
and check on the latest industry developments before taking any
Resentment, however, has been building in Europe for years.
Google has tried to counter that mistrust, which its
executives believe is linked to European perceptions of the
United States in general. But recent revelations about U.S.
surveillance practices, including that Washington monitored
German Chancellor Angela Merkel's phone, have ignited a strong
backlash, particularly in Germany, where the historic
experiences of Nazism and Communism have left people deeply
suspicious of powerful institutions controlling personal data.
Andreas Schwab, the German Christian Democrat lawmaker who
co-sponsored the resolution, told Reuters it was "very likely"
it would be adopted as both his own centre-right group, the
largest in parliament, and the main centre-left group supported
it. Schwab proposed the resolution along with Spanish centrist
Ramon Tremosa earlier this week.
In a statement on Wednesday, the two said Google had failed
to propose adequate remedies during the antitrust investigation
by the commission. Vestager has said she wants time to study the
dossier after her predecessor decided against a settlement with
Google that would have ended the case.
Google "continued thereby to suppress competition to the
detriment of European consumers and businesses," Schwab and
In a position paper, they cited a number of possible
solutions to what they saw as Google's abusive dominant position
in search engines and its ability to drive Internet traffic to
favored sites. If these failed, then, they suggested,
legislation should be tried.
"In case the proceedings against Google carry on without any
satisfying decisions and the current anti-competitive behavior
continues to exist, a regulation of the dominant online web
search should be envisaged," they said.
Reflecting broad suspicion of Google, other parties in
parliament may also support the non-binding resolution.
Jan Philipp Albrecht of the Greens said: "Search engines
like Google should not be allowed to use their market power to
push forward other commercial activities of the same company.
Officials at the European Commission could not be
immediately reached for comment.
It was also not clear how U.S. regulators would respond. In
a major victory for Google, U.S. regulators in 2013 ended an
investigation into the Internet company and concluded that it
had not manipulated Web search results to hurt rivals. It did
get Google to agree to change some of its business practices,
including halting the "scraping" of reviews and other data from
rivals' websites for its own products.
Rivals such as Yelp Inc argue that the company is
squeezing them out in Internet search results.
The review site, which has complained that Google ranks its
own content higher than Yelp's, said on Friday that the Internet
search service harms users by favoring its own products, for
instance social network Google+, which also carries review
"By hardwiring Google+ in the largest category of search,
Google isn't just stifling innovation, it's harming consumers,"
Luther Lowe, Yelp Director of Public Policy, told Reuters.
(Additional reporting by Dan Levine in San Francisco, writing
by Edwin Chan; editing by James Dalgleish, Peter Henderson and