Dismantling Giants

Breaking Up Is Hard to Do

Google for Disort-DISTORTED
Picking apart Google could be easier said than done.
  • Why it matters

    Why it matters

    • Concerns in Europe over Google’s market power is putting pressure on E.U. and national politicians to look at Google and other Internet firms’ market power. This may lead to new regulations affecting operations of the U.S. company and others.
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  • Facts

    Facts

    • The E.U. parliament will vote on Thursday on a proposal to unbundle Google.
    • The European Commission has been investigating Gogole for four years on the misuse of market power.
    • Germany’s economics minister Sigmar Gabriel warned in May that a breakup of such firms should be seriously considered.
  • Audio

    Audio

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This week, the E.U. parliament began the debate over the dismantling of Google.

This is not a new idea.

In mid May, in a debate about Google and politics, Sigmar Gabriel, the German economics minister, called on politicians to consider unbundling the ownership of “information capitalists,” even if only as a last resort.

His listeners reacted with concern, because of the market power of the search engine giant.

Despite its linguistic proximity to expropriation or “dismantling,” the concept of ownership unbundling is not social or social democratic but is often seen as an instrument of regulatory policy in capitalist economic systems.

In the United States – backed by the Sherman Act – large companies have often been unbundled.

In Germany, there have been no prominent unbundling procedures up to now, because no appropriate legal basis existed.

But politicians have long considered introducing a legal framework to unbundle large corporations suspected of misquestionable activity.

A clause was introduced in 2013 modelled on an E.U. law to allow the German Federal Cartel Office to take any  corrective measures necessary; such as spinning off joint ventures, for example.

But it’s still uncertain whether the regulation provides enough legal basis for more aggressive plans. After all, these would encroach on the the rights of companies and their investors. In any case, national regulations probably lack the reach to unbundle international firms like Google.

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