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The EU could have forcibly broken Google up by now if strict new proposals on tech regulation had already been in place, experts say.
On Tuesday, Ursula von Der Leyen, president of the European Commission, unveiled the first draft of the Digital Services Act and the Digital Markets Act, which – while still a way off being imposed – could in time have serious implications for Big Tech.
Under the proposals, large firms fined for anti-competitive behavior three times in the space of five years could be subject to “structural remedies”, with different parts of their businesses being forcibly separated.
Here’s the relevant part of the draft legislation, emphasis ours:
Google has already been fined for anti-competitive behaviour — over search, shopping, and Android – by the EU three times in as many years: first for $2.7 billion in 2017, again for $5 billion in 2018, and once more for $1.7 billion in 2019. The firm has repeatedly rejected the EU’s findings, and met officials in court to appeal the first fine earlier this year.
The Act itself is primarily concerned with “gatekeeper platforms”, a shorthand for large tech businesses that control a range of services, such as social media platforms, search engines, or messaging services, at the same time.
Under these proposals, the Commission’s Competition Authority would “have the power to break it or any other repeat offender up,” according to Amanda Brock, CEO of non-profit OpenUK and chair of the UN’s Open Source and Intellectual Property Advisory Group.
“Google would, like a number of other incumbents, be a potential candidate gatekeeper and therefore subject to the applicable provisions if they become law,” she told Business Insider.
“On this basis there is a possibility the authorities would have tried to require Google to undertake a divestiture of part of its business if that was viewed as proportionate, rather than simply impose fines on three occasions in three years.”
The prospect of a Google breakup in Europe may still be far away, however. Regulators move slowly and, as evidenced by Google’s ongoing appeals against its fines, the search giant would likely challenge any action in court in a process that would play out over years.
Sophie Dembinski, head of public policy at rival search firm Ecosia, told Business Insider terms of the DMA “could, in theory, threaten Google’s position” but said regulators needed to be firm in their decisions.
“What really matters is enforcement,” she said. “The EU has now ruled against Google’s dominance three times in the last three years, for anti-competitive practices in shopping, advertising and search. Each of these decisions handed out large fines – but, these fines remain unpaid, and dominance in each sector has continued, fully unabated.”
She added: “While the DMA is certainly a regulation that we can support, what will be most impactful in the immediate term is a concerted effort on the part of the EU to enforce the decisions already in place.”
Karan Bhatia, Google’s vice president of government affairs and policy, said the EU appeared to be targeting specific companies.
He said in a statement: “While we will review the Commission’s proposals carefully over the coming days, we are concerned that they appear to specifically target a handful of companies and make it harder to develop new products to support small businesses in Europe.
“We will continue to advocate for new rules that support innovation, increase responsibility and promote economic recovery to the benefit of European consumers and businesses.”