The European Union (or more precisely the European Commission) has been turning up the heat against Google for monopolistic behavior recent weeks. An opinion piece on the subject appeared the other day in the New York Times, which it is worthy of note and comment as it raises some prickly propositions, suggesting the whiff of protectionism. The author, among other things, contends that the search giant Google and other tech behemoths such as Apple, Facebook, and Amazon(collectively referred to GAFA) are targets out of jealousy, and an anti-America posture by the EU.
Google currently handles nine out of ten Internet searches in Europe – an even greater percentage than in the US. Because of this worrying statistic, Europe (most notably France) fears the imposition of American culture, while Germany loathes the industrial supremacy of the tech giants from across the pond.
This, argues Jo Nocera, is giving rise to a Continental fever and fervor for developing its own Internet platforms and tech capabilities, but in the meantime he laments the attacks on American enterprises while Europe gets its act together, and cites politics as the driver of the anti-Google actions.
Mentioning comments made by the relatively new EU Competition Commissioner, Margrethe Vestager, who is initiating the procedures (after dismay at an accommodating stance by her predecessor), and the former energy commissioner from Germany, Gunther Oettinger, Nocera argues that these are ploys to buy time for Europe to develop home-grown companies. Oettinger apparently relished blowing up the accommodating agreement hammered out with Google last year, and has publicly stated that Google must be reined in.
The European ire against Google and other innovative companies is, in my view, misplaced. Europe lags behind because it is in disarray politically and financially, as compared to the US. To be fair, Google has been around for longer than the 28 country EU, but there is more. Many American companies are thriving in Europe because it possesses an attractive tax advantage to companies, and an incentive not to repatriate profits back home to the US.
Help the US close the tax loopholes, and there will be less focus on Europe. But, alluding again to the disarray in Europe, there are countries in the EU who do not want to give up their privileged tax- haven status, and as a result lose business.
But the overriding problem in Europe as compared to the US is that Europe is not an engine of innovation – its policies are too disjointed and a unified financial and tax system non-existent. In a climate such as this, ideas cannot incubate… and hence innovation is stifled. Apparently what it does possess, however, is a large dose of envy, and a desire for revenge when it should be focusing inward on itself. Europe has every right to regulate any company and industry it desires to, but its rhetoric suggests an ulterior motive against anything American, and without competing companies, it does so at its peril.