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Could the European Union break up Google?

Could the European Union break up Google?
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Google and the European Union aren't on great terms. Over the past five years, the EU has investigated Google under antitrust laws, criticized its privacy practices in Street View photos and for Wi-Fi collection, and even forced it to remove links from searches when EU citizens request it.

However, the EU is still worried because Google owns 90% of the European search market. While the EU hasn't been able to prove that Google uses its wide reach for anything unethical - such as favoring its own services over competitors - legislators still worry that Google might in the future.

This has led to some interesting proposals, one of which includes forcing Google to split Search from its other products. If you've used Google, you know how interconnected its services are, which would make that a huge undertaking.

The result probably wouldn't change much anyway. Internet users would need to have separate passwords for Google Search -assuming they wanted one - and other Google services.

Of course, the big question is whether or not the EU even has the power to do this in the first place. Naturally, the answer is tricky.

In a general sense, the EU has no power over Google as Google is an American company. However, the EU can fine Google for not complying with EU laws.

The tricky part is that because Google is an online company, it can't just "leave" Europe if it doesn't want to play along. True, it can shut down its Europe-specific sites - google.co.uk, google.de, etc. - but anyone with an Internet connection could still get to Google.com.

Even if Google denied access to European IP addresses, people can still get around that. The only countries that can truly shut off Google are ones like China or Iran, which have country-wide firewalls.

Not that Google wants to shut down in the EU anyway, since that's a huge market. So, it might go along with what the EU tells it to do. Of course, it would probably only do it for its European sites.

A similar example of this from the recent past is Microsoft. Back in 2009, the EU told Microsoft it couldn't make Internet Explorer the default browser in Windows 7.

Instead, Microsoft had to create a randomized "ballot" system that let the user choose their browser when they first installed Windows. Microsoft went ahead and made a special version of Windows for European markets - and it took a while since the EU kept adding changes.

The result was that it made no difference to any browser's market share in Europe. Not only that, the Windows 7 Service Pack 1 update broke the ballot system and - after finally noticing a year later - the EU fined Microsoft $732 million.

So, the EU isn't a stranger to these kinds of laws and fines. However, given the popularity of Google Search, Maps, YouTube, etc., it's probably going to be cautious.

If the EU overplays its hand, it could get push back from inconvenienced European citizens and even other major tech companies worried that the EU might come after them next.

How this plays out should be interesting to watch. I'll keep you updated on the latest.

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Source: Bloomberg
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