E.U. ramps up pressure on U.S. net giants

November 28, 2014, 12:20 PM UTC
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France and Germany have asked the European Union’s Commission to overhaul its antitrust laws, in a move that will ramp up the pressure on some of the biggest U.S. internet companies.

A joint letter by the two countries’ governments sent to the Commission Thursday stresses the need to bring regulation up to date to cope with the realities of the digital economy. The initiative builds on other concerns over what some see as violations of privacy and aggressive tax practices by companies such as Google Inc. (FB).

“We need a review of our antitrust law because the classical antitrust law is no longer adequate for what is taking place in society by virtue of digitalisation,” German deputy economy minister Mathias Machnig told a joint press conference in Brussels.

The two governments, which have traditionally been the driving force behind most new European law, made their request on the same day that the E.U. Parliament voted overwhelmingly in favor of unbundling search engines from other commercial activities, in a thinly veiled attempt to break Google’s near-monopoly in search in Europe.

The vote, which called on the Commission “to prevent any abuse in the marketing of interlinked services by operators of search engines”, passed by 384 votes to 174 with 56 abstentions.

The vote also reiterated Europe’s position in favor of net neutrality, and against a multi-tiered pricing system for access to bandwidth.

Although it isn’t binding on the Commission, which is responsible for drafting new legislation at the E.U. level, the vote reflects a solid majority among Europe’s mainstream political parties for clipping the wings of the Mountain View-based giant.

The vote had earlier drawn criticism from Capital Hill, with four Congressmen writing to the Parliament’s Speaker, Martin Schulz that they were “alarmed by proposals that seem to target U.S. technology companies, create market access barriers and limit innovation.”

Michiel van Hulten, a Brussels-based consultant specialising in transparency issues, pointed out that three of the four authors had taken nearly $77,000 in campaign donations from Google in the most recent electoral cycle. They were Dave Camp, chairman of the House of Representatives’ Ways and Means Committee, Ron Wyden, head of the Senate Committee on Finance and Senator Orrin Hatch.

Google didn’t immediately reply to a request for comment.