Antitrust Law Daily Wrap Up, ANTITRUST NEWS: European bid to split Google slammed in U.S. for “politicizing” issue, (Nov 25, 2014)

By Brian Hammond,TRDaily

The European Parliament is expected to begin debate tomorrow on a draft resolution on "consumer rights in the digital single market" that suggests splitting up Google, Inc., prompting concerns from government and industry officials in the U.S. about the "politicization" of what they see as a fact-based antitrust issue.

Google has been the subject of a long-running investigation by the European Commission into its search practices. The probe was recently taken over by Commissioner Margrethe Vestager, who now oversees competition issues in the newly formed European Commission.

Vestager recently said she would "need some time" to decide on the next steps in the commission's probe. "To decide how to take our investigations forward, I need to know what those most directly affected by the practices in question have to say. I need to have a representative sample of views of those concerned," she said. "Also, we are talking about fast moving markets – I have to be sure that we have all the facts up to date to get it right. In short, the issues at stake in our investigations have a big potential impact on many players, they are multifaceted and complex."

The Commissioner could get a nudge forward in the form of draft legislation to be debated tomorrow and voted on the next day in Parliament. Andreas Schwab, a German member of Parliament and backer of the legislation, says he wants the commission to take a "fresh look" at the complaints against Google and to ensure that all of its practices that could distort competition are examined.

The draft legislation championed by Mr. Schwab does not address Google by name but calls on the Commission to "enforce EU competition rules decisively" in the search engine market, "based on input from all relevant stakeholders and taking into account the entire structure of the digital single market in order to ensure remedies that truly benefit consumers, internet users and online businesses." In addition, the draft calls on the commission to "consider proposals aimed at unbundling search engines from other commercial services as one potential long-term means of achieving the aforementioned aims."

The shot at Google has raised concerns from industry and government officials in the U.S.

In a letter to European Parliament leaders today, House Judiciary Chairman Bob Goodlatte (R., Va.) said he was "troubled to learn that some European elected officials are encouraging antitrust enforcement efforts that appear to be motivated by politics, rather than grounded in factual and legal principles.

"We believe that antitrust enforcement should be applied independent of politics and firmly rooted in our shared international principles," Chairman Goodlatte wrote. "Policies that run counter to these principles undermine our free markets and ultimately harm both our businesses and our consumers."

"We urge you to continue to advocate for our shared principles of transparent, fair, predictable, and fact and legal-based antitrust enforcement," he added. "We look forward to continue working together on these important goals."

In another letter this afternoon, a bipartisan group of House members wrote to express concern over the proposal to segregate search engines from other commercial services. “As elected representatives who represent tech corridors around the United States, we have seen first-hand the transformative impact of online based services, including e-mail, social media and search on our society and the economy,” the lawmakers wrote. “Through cross-border data flows, millions around the world have experienced these same benefits. In fact, by one account, online intermediaries, many of which are U.S. based companies, were responsible for contributing more than $500 billion to the GDP of the EU27 in 2012. Cumulatively, U.S. firms have invested $2.1 trillion in the EU.

“It is therefore troubling to us that the European Parliament is suggesting an action that would stem cross-border data flows at the expense of millions of people across Europe who enjoy the use of these online services every day,” they wrote. “We support healthy competition and a fair playing field for Internet companies in the U.S. and around the globe and we believe these goals can be accomplished through the traditional regulatory process.”

The letter was signed by Reps. Anna Eshoo (D., Calif.), Zoe Lofgren (D., Calif.), Jared Polis (D., Colo.), Mike Honda (D., Calif.), Tony Cardenas (D., Calif.), Eric Swalwell (D., Calif.), Jason Chaffetz (R., Utah), Darrell Issa (R., Calif.), Kevin Yoder (R., Kans.), Blake Farenthold (R., Texas), Peter Roskam (R., Ill.), and George Holding (R., N.C.).

According to media reports this afternoon, the U.S. Mission to the European Union also had written to raise concerns about the legislation and caution that identifying competition harms and potential remedies should be based on "objective and impartial findings and not be politicized."

The Computer & Communications Industry Association, which counts Google as a member, said the "increased politicization of the Google competition investigation is deeply troubling."

"We have often sided with EU and U.S. competition authorities in support of vigorous enforcement even when focused on our industry’s companies when the facts and law justified action," CCIA wrote on its blog. "It potentially undermines the legitimacy of competition law if it is seen merely as another tool to be manipulated by special pleading and used for protectionist and political ends.

"Competition investigations are legal proceedings that should be decided on the facts and the law," CCIA added. "This motion, especially if passed by Parliament, threatens to undermine the credibility of a long running Commission investigation by blatantly interjecting politics into a legal process.”

Although the focus of discussion on the legislation has involved the terms apparently targeting Google, it also includes language touching on a wide range of other technology policy issues. The legislation calls on member states and the European Commission, "through sustained efforts of implementation of existing rules and enforcement of these rules, as part of an overarching strategy, to address all existing barriers that are hindering the development of the digital single market."

Touching on net neutrality, the legislation stresses that "all internet traffic should be treated equally, without discrimination, restriction or interference, irrespective of its sender, receiver, type, content, device, service or application."

The draft also urges the European Council of Ministers to "make swift progress and open negotiations with Parliament on the proposal for a regulation laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, as this would, concretely, put an end to roaming charges inside the EU, provide more legal certainty as regards net neutrality, and improve consumer protection inside the digital single market.” It also “believes that this regulation could constitute a crucial step towards realising a single European mobile market."

The legislation calls for the "swift adoption of the new modernised Data Protection Package in order to provide an appropriate balance between a high level of protection of personal data, user safety and control over one’s personal data and a stable, predictable legislative environment in which businesses can flourish in an enhanced single market for the benefit of end-users, a level playing field fostering investment, and an environment contributing to the attractiveness of the EU as a destination for businesses." It also calls on the EC and member states to "allocate the necessary resources to fight cybercrime by means of legislative measures and law enforcement cooperation, at both national and EU level."

The legislation further advocates European Commission action on copyright reform, intellectual property rights, facilitation of access of disabled users to digital content and printed works through their digitization, cloud computing standards, and privacy.

News: Antitrust