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Comment by tbirrell | Hacker News Reader

Does the EU even have the authority to break up Google/Alphabet?

The EU effectively has the authority to decide who can do business in Europe. So Google/Alphabet presumably could refuse an EU breakup order, but they'd have to more or less exit business in Europe, including all of their various offices there. Both a lot of profit and talent left on the table.

Someone much smarter than me would likely have to determine whether stockholders benefit more from a split up company that can do business in Europe, or a unified company that can't.

The political backlash could make such a withdrawal rather temporary. Which would IMO push Google into staging such a withdrawal.

It would be quite a bold move. Alternatives exist, and it's very much contrary to Google's interest that people try it, and people will try it if Google stops working.

These things take some time. They could add a banner saying they are shutting down in say 6* weeks with a link saying they are exploring options while trying to comply etc etc.

With 6 weeks being the required notice before everyone is laid off or whatever.

What backlash? Save from a well run PR and lobby campaign by Google, few consumers would mind.

What percent of the EU uses Gmail? Right off that bat, that's a massive inconvenience.

Could such a breakup order or sanctions be specific to certain businesses?

Google has a strong position in the email space, but it isn't anywhere as dominant as it is with search and web advertising.

> Google has a strong position in the email space, but it isn't anywhere as dominant as it is with search and web advertising.

What?? The whole point of a breakup is precisely because they are dominant in all of the things you mentioned. Also, my comment is irrelevant if they actually comply with a breakup order. If they don't, and they withdraw from the EU, it doesn't matter how the breakup is structured because they cease doing business in the EU anyway.

Spain tried it. It started with a bang like this [1] and ended with a whimper like this [2].

[1] https://www.theguardian.com/world/2014/dec/16/google-news-sp...

[2] https://techcrunch.com/2014/12/14/spanish-newspapers-want-go...

I don't think a minor scuffle about Google News, a product Google's profits aren't dependent on, and user data isn't contained in, is a relevant comparison to discussion of what would happen if a search/email-level breakup was in the cards.

I just mean that Ms. Vestager is not the only one who can play hardball or rattle sabers here. Google can and has done it in the past.

You're kidding, right? You don't think people would be upset when they cannot access Gmail, Google search results, or Google Maps? And a message in each service asking users to contact their representatives if they want access to the services again would be all that is required.

That would be a very unlikely consequence of breaking up Google.

Oh, this could be a preemptive move by Google before enforcement of the breakup even happened.

Google may seem powerful and almighty to us now, but at the end of the day they would have to cave if - despite lobbying efforts - one of their major markets demanded a breakup.

Well we know how people would react, because it happened before when Google was forced out of China.

Everyone there uses a local alternative and doesn’t give a fuck about Google anymore

that's BS, Google wasn't anywhere near as widespread in China as it is in Europe.

which is also why Google was fine with leaving China

You're kidding right? You don't think people would be upset when they cannot access their funds though their favored stock broker or bank? Each bank would lobby their customers to contact their representatives. They're too big to fail! They're too integral to the economy to consider even breaking them up. /s

I'm not suggesting that Google isn't a monopoly or that it shouldn't be broken up. I'm suggesting that Google could withhold services from the EU instead of agreeing to be broken up. Unlike a bank where its customers could demand their money back, Google owes its users nothing.

Hmm that's an interesting point. However, much like a bank needs customers doesn't Google need users? I find it not very persuasive that withholding an entire continent of users would result in much more than an empty threat on Google's part. If Google can't service Europe, then Europe would develop its own services, much like China has, a terrifying prospect for both American foreign policy and Google's future prospects. Perhaps Europe would even turn to Baidu. I don't think that would happen, but the threat would be alarming to Google's negotiators.

EU law considers a citizen's data their personal property (akin to a bank holding a citizen's money), and Google is holding a lot of it. Google could get into significant additional legal trouble depending on the method they chose to withdraw their services.

What happens to people's emails in Gmail if they exit business in Europe? Surely people won't just be cool with their leaders making them lose access to their emails?

EDIT: I guess I didn't mean "what if Google was forced to do this overnight?", but rather I meant more like "couldn't Google make this backfire by doing this overnight?".

I am actually pretty sure that Google will not exit business in Europe. And even if it does happen, I am sure that not all of Google will vanish from Europe overnight and people will be able to download all their data.

Google offers Takeout today which lets you download your data.

Good luck finding somewhere else you can reimport that and continue working. It might as well be an encrypted blob.

I think it would be more like Google couldn't sell advertising to European companies, nor provide other paid services like licensing and the sort.

It probably wouldn't happen over night, there would be some time to get data out of google. Taking into account that gmail is still accessible by IMAP I guess there would be a plenty of other providers who would offer transfer of your emails from Google to a new email account.

That's one part of the negotiation puzzle. EU would want it's citizens to retain access to their google-hosted emails.

Legally speaking, I'm sure there's plenty of ways the EU can force Google to do things it currently does not want to do.

I'd say the EU has lots of negotional angles currently to win things from Google. That is kind of what you get when you have more or less universal legislation power over 40% or so of the world's purchasing power (please correct me, I just bullshitted that guess). And that, alas, was also a large part of why the EU was born. So now we'll will reap the benefits.

If I could say anything to our EU negotiators in this case, it would be: stay brave.

> That is kind of what you get when you have more or less universal legislation power over 40% or so of the world's purchasing power (please correct me, I just bullshitted that guess).

Europe GDP is 20.9 Trillion USD. The world GDP is 107 Trillion USD. So Europe is only 20% of the world GDP.

But one can make the argument that EU citizens are better connected and spend more on digital goods. Though I'd be surprised if it drives more than 30% of Google revenue.

Alphabet Inc. break their revenue down into:

EMEA, APAC, Other Americas, US

Out of this, in 2017, EMEA was 32.5% of total revenue, based on numbers from page 33 of https://abc.xyz/investor/pdf/20171231_alphabet_10K.pdf.

My bullshit-guess is that out of those 32.5 percent units, EU/EES was responsible for about 31 units or so, and the rest 1.5 was from the middle east and africa. (Reasoning: the ME certainly has money, but no population to speak of. Africa has lots of people but besides relatively tiny South Africa very little revenue for Google.)

So yeah, the EU has a pretty powerful hammer.

Let me ask you: If Google closed everyone's Gmail accounts overnight to make a political statement, even if the EU relented, how many customers would stay with Google after that? There are limits to how much Google can punish users for their countries' legal decisions without risking losing those users forever.

Not many, but if they see not being broken up as fundamental to their business model working (I don't know if they do, but I could imagine Gmail not making much money on its own might pose problems), it might not make that much of a difference for them.

Probably not directly. Indirectly though that can do lots of things. Google will find it hard to sell ads if their salesmen are not allowed to physically enter the EU (and the ones currently in the EU are told their job is illegal - though how that works is an open question). In short the EU do lots of things to harass the EU operations until they decide they have to break up.

The EU has the authority to break up the Alphabet subsidiaries (including indirect subsidiaries) operating in the EU, and the authority to require a breakup as condition of allowing any of the rest of Alphabet to do business in any form in the EU.

I don't think they really can. Effectively, they'd have to block Google in the EU. Otherwise, Google can technically just stay in the U.S. and sell services. Ad's don't have to be location based, pretty sure a lot of advertising is elicit materials (such as porn) anyway - which already may not be allowed.

Unless you stop people from just heading to the top search engine in the world, they'll keep using it.

There’s a simple trick known as asking the banks where Google keeps their money to freeze those assets.

And that place is called the US.

This didnt even work when it was simply a question of having transnational companies on the level of facebook having to pay taxes.

And then there’s other solutions you can do.

E.g., seizing Google’s copyrights and patents, and selling EU usage rights for them. Or seizing the physical hardware, and selling them (and the software on them) off.

There’s many many solutions here.

In the past, european governments have already seized airplanes from airlines upon landing, and threatened to auction them off, to pay a single unpaid $500 ticket return fine.

> E.g., seizing Google’s copyrights and patents, and selling EU usage rights for them. Or seizing the physical hardware, and selling them (and the software on them) off.

The retaliation from the US government on that one would be pretty epic. I wouldn't want to be an owner of a patent heavy European company at that point. Our current President is quite familiar with eminent domain.

What's the trade balance with IP between the US and the EU? Whichever side is benefiting from that the most, also has the most to lose

Actually, AFAIK Google still stashes most of it's European profits with a Caribbean island to avoid the taxes of bringing it back to the US. I know Apple's announced a plan to bring their money back in, but I don't know if Google has yet. With the current tax deal in place, they have little reason not to.

Blocking companys and growing ones own version of them, worked well for nearly every country who did it. (China, South Korea, Japan). Its a miracle the EU did this not earlier, and i guess Trumps punitive tariffs encourage dreams in some well-bribed politicians, to look for new sources of income by growing there own it-giants.

There are several things the EU can do. First of all, they can freeze and/or seize Google's assets in Europe. Like bank accounts and real estate. Or even more important to Google, all of their European datacenters.

The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.

And selling ads in Europe from a foreign country isn't too easy either. It is a lot harder to do business with a company which is on the other side of the ocean, and officially doesn't have a precense in the same economic area.

If Google leaves all of that behind in Europe, and is not really allowed to do business in Europe anymore, soon enough there will be a competitor that stands up and can do things better. Especially if they can actually open offices in Europe and do business without major hurdles.

> There are several things the EU can do. First of all, they can freeze and/or seize Google's assets in Europe. Like bank accounts and real estate. Or even more important to Google, all of their European datacenters.

> The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.

Without giving them plenty of time to pullout? This will probably trigger panic across of the multinationals.

> Without giving them plenty of time to pullout?

These things take a long time. Google was abusing its search monopoly before the EU started a seven-year investigation that resuled in a $2.7 billion fine ... which it is now appealing.

Google settled with the US in 2013. It agreed to change some of its search practices and got away without a fine.

I'd be surprised if Google didn't know it was abusing its search monopoly. I'd assume it calculated that it was more profitable to keep doing it until compelled to stop.

Either way, a seven-year investigation provides plenty of time to prepare for exit strategies, if required, and it would grossly incompetent not to have prepared for them.

I say that blocking google in EU would actually be a good thing for a consumer. It would force people to try out alternatives (which do exist).

Google currently has a monopoly for search, email, maps (and many other services which I care less about) it is crazy that we allowed it to happen.

It's not too far fetch that Google pretty much owns the internet. If Google blocks you or your company you might as well not exist.

There never should be a single entity that has so much power.

If the EU forced Google to breakup search, email, and maps, (and assuming they're monopolies now) why wouldn't those continue to be monopolies?

It can ban them from operating in the EU unless they break up. The U.S. can also just break them up without a threat of banning them to get there. But certainly the EU have plenty of leverage.

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