Google facing challenges to its bold ambitions in Europe
Google Inc. is under siege in Europe, where its bold ambitions have raised alarms.
The Internet giant has tangled with regulators, lawmakers and consumer watchdogs over privacy concerns, copyright protection and the sheer dominance of its search engine.
This week the European Commission launched an antitrust probe of the Mountain View, Calif., company in response to complaints from three European search sites. Also this week an Italian court convicted three Google executives in absentia of violating privacy laws there.
“Europeans have a much longer history of pursuing these issues than we do,” said Palo Alto attorney Gary Reback, who represents a coalition opposed to giving Google the digital rights to millions of hard-to-find books. “These issues are serious and they are not going to go away.”
The latest spate of troubles come on the heels of heated debates over Google’s digital scanning of books in France and the company’s plans to roll out its Street View service in Germany.
“This is just another case of Google naively believing that the work it does will be celebrated everywhere,” said Siva Vaidhyanathan, a University of Virginia professor who is writing a book about the Internet giant. “Google is going to have to tread more lightly in Europe and around the world.”
The stakes are high as Google’s overseas operations have grown increasingly important. The company generated more than half of its revenue overseas in 2009. Western Europe is a key market for Google. Google collected about $3 billion or 13% of its 2009 revenue from Britain alone.
“One could easily argue that Google has far greater market share in certain important European markets than in the United States,” Standard & Poor’s analyst Scott Kessler said.
Google said it would appeal the conviction of three of its executives for violating Italian privacy laws Wednesday, calling it an “astonishing” attack on online freedom of expression. The company warned that the ruling could have a chilling effect on user-generated content in Europe.
The Italian court handed out six-month suspended jail terms to the executives, who did not appear in court, and acquitted a marketing manager. The case involved online videos of an autistic boy being teased by his classmates in Turin, Italy. The videos were posted in 2006 on Google Video, a now-defunct service that Google ran before it bought YouTube. Prosecutors argued that the videos violated Italian privacy protections.
“None of the four Googlers charged had anything to do with this video,” Google spokesman Matt Sucherman said in a blog post. “They did not appear in it, film it, upload it or review it. None of them know the people involved or were even aware of the video’s existence until after it was removed. It is outrageous that they have been subjected to a trial at all.”
The ruling could set a precedent in Europe for holding Internet companies liable for content posted by users on their video-sharing websites. The companies rely on users to notify them if content violates its terms of service. Google contends that Internet companies are shielded from liability, but legal experts say it’s a gray area.
“Laws in Europe tend to be more protective of privacy than they are in the United States. But I still think the verdict is pretty shocking,” UCLA law professor Neil Netanel said. “I don’t know how user-generated content sites can operate there.”
Google faces rising tensions in Italy. The company is embroiled in a copyright lawsuit brought by Italian broadcaster Mediaset and in an antitrust investigation spurred by complaints from newspapers publishers that Google has too much control over the online advertising business.
The company pushed back Wednesday against an inquiry from the powerful European Commission that has pursued antitrust cases against Microsoft Corp., Intel Corp. and other high-tech giants. Google disputed the claim that it had abused its market power in online search and advertising. The commission has not opened a formal investigation.
“It’s not just how they negotiate the legal processes in all of these jurisdictions, but also what that portends for further investment and growth in those locations,” Standard & Poor’s Kessler said about Google.