BRUSSELS — Europe may be a financial disaster and a faded military force, but in at least one arena it has emerged as champ: Regulators here are challenging the power of America’s technology titans. And they are winning.
Google is most squarely in the crosshairs as its officials negotiate furiously in hopes of avoiding a $4 billion fine and a formal ruling that it has abused its dominance in the search market to hurt rivals across a range of industries. A deal could be days away.
Many of these issues, including the antitrust case against Google, also have been investigated by American regulators. But the laws here are stricter, the fines bigger and the courts more supportive of aggressive government action — to the point that many experts say the legal landscape of the technology industry is being shaped more profoundly here than in the United States.
“The pipeline is packed with these cases,” said Nicolas Petit, a professor at Belgium’s University of Liege Law School who watches the technology industry closely.
Whether Google gets labeled a monopolist is largely in the hands of Joaquin Almunia, a former Spanish labor leader and onetime Socialist candidate for prime minister who is the European Union’s top antitrust enforcer.
Almunia has pushed hard for a negotiated settlement in hopes of avoiding a years-long battle of the type that European regulators once waged with Microsoft over its Windows operating system. People closely watching the Google case predict that this week — the last before a long summer break hobbles operations here — will produce a deal or a formal “statement of objections,” essentially an indictment on allegations of monopolistic behavior.
Almunia said that a negotiated deal would be a better outcome and that the company’s proposals — there have been at least two rounds of them this month — are seeking to address the issues he has raised rather than disputing them.
“What was Google’s motto at the beginning? ‘Don’t be evil?’ ” Almunia said in an interview at his office here, the headquarters of the E.U. “I hope it continues to be important.”
The case is being tracked by regulators worldwide, including at the U.S. Federal Trade Commission, which has hired a prominent lawyer to lead its antitrust investigation of Google.
"We continue to work cooperatively with the European Commission," said William Echikson, a Google spokesman in Brussels.
Risk to Google
Almunia already has determined that the Google antitrust claims merit serious treatment, given that the company has more than 90 percent of the search market in some European countries. But having a monopoly is not a violation of law here; a company must abuse its dominance of a market to run afoul of regulators.
Almunia’s office has outlined four potential abuses of dominance in preliminary filings. In the interview, he expressed particular concern that Google may be altering its results in a way that keeps users from having access to the best possible services, especially ones that compete with Google’s offerings.
“The potential providers suffer in their profits, and the customers will receive . . . worse service,” he said.
The risk to Google, analysts say, goes beyond the potential for fines because their business long has depended on users believing that search results are crafted primarily to serve their needs — not those of advertisers. A finding of abusive monopolistic behavior threatens to undermine its carefully cultivated public image.
Its reputation suffered a dent last year, when French regulators fined Google $142,000 because its Street View program had gathered sensitive personal information from private wireless Internet signals as the company’s cars crisscrossed the world capturing images.
Google had acknowledged the secret data collection and apologized, blaming a single engineer for creating the data-collection feature without approval of senior management. It also said there was nothing personally identifiable in the data.
The French Data Protection Authority, however, discovered users’ passwords and lists of pornographic Web sites they were visiting when a Street View car drove by. In one instance, a Google car collected an e-mail exchange between a man and a woman — each married but not to each other — attempting to arrange a liaison. Global Positioning System data along with e-mail addresses made them clearly identifiable, the regulators concluded.
American regulators at the Federal Communications Commission investigated the same issue but found no violation of law. It fined Google $25,000 in April for obstructing the investigation.