France and Germany Thursday (27 November) called on the European Commission to review competition rules surrounding on-line “web-platforms” – notably search engines such as Google – in order to create “a more level playing field” and encourage European companies into the market.
The move followed a resolution in the European Parliament calling for similar action earlier in the day.
The US search giant is already subject to a separate ongoing investigation being conducted by Competition Commissioner Margrethe Vestager (see background).
French digital affairs minister Axelle Lemaire and German economic and energy affairs minister Matthias Machnig briefed journalists on the fringes of a transport, telecommunications and energy Council meeting which discussed proposals for European telecoms legislation.
In a joint statement, the pair said their two countries wanted to encourage the Commission further to develop competition law to cope with new challenges from Google and other “web platforms”.
They said that – with only 2% of listed companies in the over-the-top digital sector in European markets being European – the market needed redress.
Search engine dominates market
They also called for more support for the European IT sector, and backed an EU probe into the tax practises of foreign digital giants in Europe.
“Google is the focal point of the market and of public debate. We need a level playing field for IT companies in Europe,” an EU diplomat speaking on condition of anonymity told EURACTIV afterwards.
“If you google some city or street the first thing you get is Google Maps; not [French mapmaker] Michelin or [German] Falk. Let’s say there is an innovative map supplier in the EU, they do not have as great a chance,” the diplomat added.
The Franco-German initiative reflected the Parliamentary motion passed earlier that day in Strasbourg.
MEPs called on member states and the Commission “to prevent any abuse in the marketing of interlinked services by operators of search engines” in a thinly veiled threat to Google’s market leading position in the search market.
The move came in a resolution – approved by 384 votes to 174, with 56 abstentions – demanding the break down of barriers to the growth of the EU’s digital single market and stressing the importance of non-discriminatory online search.
Net neutrality on backburner
MEPs stressed the need to prevent online companies from abusing dominant positions by enforcing EU competition rules and unbundling search engines from other commercial services.
The resolution underlined that “the online search market is of particular importance in ensuring competitive conditions within the digital single market” and welcomed the Commission’s pledges to investigate further the search engines’ practices.
“I think we are all thinking in the same direction. There is no ready-made plan in the drawer to take out and say: ‘That is a solution to the problem.’ We are just at the beginning of the debate,” said the diplomat.
“The idea is to provide a Franco-German thrust to the debate. We wanted to flag up that this is an issue of the utmost interest to our economies. It is time to act for Europe,” said the diplomat.
The Franco-German move emerged from a joint ministerial initiative begun in February this year.
It is unclear to what extent the proposal to reform the competition landscape will be welcomed by other member states.
Another EU diplomat told EURACTIV that although the Italians, occupying the rotating Council presidency, are currently neutral on policy issues.
“Our impression is that when they leave the presidency in January their thinking might go in the same direction [as Germany and France],” the diplomat said.
Meanwhile at the meeting in Brussels, ministers postponed discussion of measures to introduce net neutrality, since member states are unwilling to accept stricter net neutrality provisions demanded by MEPs.
Net Neutrality is the principle of keeping an open internet where data is treated equally, and preventing the development of multi-tiers whereby consumers pay more for higher bandwidth content.
In relation to the Google/competition issue a spokesman for the UK permanent representation in Brussels said it had nothing to add “for now”.
Google had not commented on the developments at time of publication.
Positions
Commenting on the vote, Green German MEP and digital agenda expert Jan Philipp Albrecht stated:"The core principle guiding the debate on the Google anti-trust case and the digital single market must be to guarantee consumer protection and net neutrality. We support the Commission in investigating potential market abuse by Google to this end. The Google search engine should not be gamed to give favourable results to its products: this would be an abuse its dominant market position. However, the resolution proposed by the EPP and socialist groups seeks to pre-empt the Commission's ruling, with a view to drawing their own conclusions for the digital single market. The failure to focus on net neutrality and consumer protection made it impossible for our group to support this political theatre."
"Net neutrality is needed for a level playing field, but also the public value of the open internet cannot be underestimated”, said MEP Marietje Schaake (Alliance of Liberals & Democrats for Europe). "The single European telecoms market that is so much needed for Europe is in real danger of becoming a reality."
“Today’s rejection by the Council of Ministers of large sections of the Telecoms Single Market package gives Europe’s policy makers a chance to take a fresh look at the region’s telecoms single market future,” said Tom Phillips, the chief regulatory officer of GSMA in a statement.
“In Europe, there is a legacy of outdated telecom-focused regulation, while major Internet players remain largely unregulated,” Phillips said, adding: “If the region is to regain its digital leadership, the EU institutions urgently need to redress the balance between the rules for network operators, who are actively investing in Europe’s digital infrastructures, and those for global Internet companies.”
“Laws on digital issues have recently risen to the top of the EU’s policy pile - from the revamp of European data protection standards to the antitrust investigation into Google search results. Few are more proving more urgent than that of Net Neutrality,” said Monique Goyens, the director-general of BEUC, the European consumer organisation.
“Europe needs Net Neutrality to, in a nutshell, preserve the open internet, make internet operators desist from manipulating traffic for commercial interest and prevent the evolution of a fast and slow lane internet where consumers pay premiums for high bandwidth content. The internet has thrived as long as it is about equal access so the EU must do all it can to ensure control of the levers is not handed to the dominant service and content providers in what is often an uncompetitive market,” said Goyens.
Background
Margrethe Vestager, the Commissioner-designate for Competition, avoided giving detailed answers to the EU's antitrust probe into Google, as well as the ongoing investigation of tax avoidance by multinationals in Ireland, during her confirmation hearing in the European Parliament on 2 October.
Queried about the ongoing Google investigation, the Danish Commissioner replied she did not know what the next steps will be, "but I am sure that there will be a next step".
The US tech giant, which dominates the search engine market, has been the focus of a Commission investigation since competitors accused the company of promoting its own services at their expense.
Further Reading
European Parliament
- Press release: MEPs zero in on internet search companies and clouds (27 Nov. 2014)
- Texts adopted (27 Nov. 2014)