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by dkei 4230 days ago
This is political posturing and grandstanding on steroids, whoever bought the EU parliament (evidently Germany publishers) did a good job.

They can’t “break up” Google, it’s an American company! it’s not based there.

Also the previous competition chief ridiculed such notions when he was recently asked about it by Parliament citing the utility companies (German ones) that would be first in line for a breakup debate if that was a tool they wanted to use:

The decision to reopen settlement talks followed vigorous criticism from a widening range of politicians, including the economy ministers of France and Germany. The latter, Sigmar Gabriel, argued in May that a forced breakup of Google should be seriously considered because of its vast market power. Werner Langen, a European lawmaker representing German Chancellor Angela Merkel's CDU party, echoed that suggestion, drawing parallels with U.S. efforts to break up monopolies in oil and other industries. "If we don't give them a bash we're not going to solve the problem," he said.

Mr. Almunia showed little sympathy for such demands. "I would tell you one thing, as a German friend," he said. "The day I [hear] that the railways will accept unbundling, electricity companies will accept unbundling, and we will discuss [unbundling] with telecom operators and others…let's discuss unbundling Google, but not before.

via http://online.wsj.com/articles/google-must-improve-search-se...

The fact that they are drafting a motion targeting one company is so shamelessly political it’s almost a public display of corruption.

Not to mention that the ludicrous levels of attention and weigh this issue is getting in the EU is unheard of and unwarranted:

One technology industry source with knowledge of the motion also called it a "politically-motivated campaign to do something that is a regulatory matter". He added: "These guys are calling for the break-up of Google. That is not in proportion to the degree of concern articulated by the commission during its investigation.

4 comments

Google is not just an American company. As a big "fuck you" to Google: the majority of revenue runs through Ireland and the Netherlands. Nice tax plan, but it means they can't easily evade the European Commission.

I actually really applaud this step. Don't get me wrong, this should not be considered anti-American, but if you run a global company getting revenue from a lot of countries you should be prepared to follow their laws and pay taxes. It is that way for physical goods, and it's pure stupid arrogance to think that delivering online products exempts you from all of it.

Can you break out exactly how much revenue goes through Ireland and the Netherlands?
Everything that does not originate in the US is run through the tax construction they have setup going through a po-box firm in Amsterdam and Ireland. The same construction is used by many others, including Facebook, Apple and even U2.

Not sure whether they specify this number in their quarterly reports, but given that it's "the world" vs the US revenue it is definitely a majority.

Edit: 17 billion out of 40 billion (both in euros and 2013 figures) global revenue runs through Google Ireland Ltd alone and that's reported as ad sales from Europe only. I did not find a report for the Netherlands, but there is more revenue from outside Europe taking this route as well since it's the cheapest route for anything that is not coming from the US.

It looks like it's very unlikely that Europe is the majority of Google's revenue, and I doubt all revenue globally outside the US runs through Ireland & Co (can you back that up with data?).

For the latest quarter: "Our revenues from outside of the United States totaled $9.55 billion, representing 58% of total revenues in the third quarter of 2014, compared to 58% in the second quarter of 2014 and 56% in the third quarter of 2013."

Unless the rest of the world outside of Europe only has ~8%, and or all global revenue actually does go through Ireland & Co (again, I'm skeptical it's 100%). That's possible, but it's seems unlikely.

There is a simple reason all revenue outside the US goes through Ireland and the Netherlands: http://en.wikipedia.org/wiki/Double_Irish_arrangement

From the Wikipedia page: "The offshore company continues to receive all of the profits from exploitation of the rights outside the US, but without paying US tax on the profits unless and until they are remitted to the US.[5]"

So yes: all of it goes through Europe.

That is a separate issue.
Google has plenty of offices (and, i'm sure, many more legal entities) in Europe:

http://www.google.ca/about/company/facts/locations/

Google being forced to close European offices and encouraged to repatriate European profits to non-European low-tax locations wouldn't stop Google Inc from continuing to run a business headquartered in California or dissuade 90% of European internet users from searching Google first.
Yeah, but if Google can't sell ads to EU companies then the letting EU citizens search on Google won't help much.
This has little bearing on the gravity of the ask, the jurisdictional authority of the EU is not unlimited.

Besides it's a disproponate legislative move targeting one company, it will in the very least raise questions.

If they go forward with it, it'll do more than raise questions. It'll ignite an international economic war, with mostly losers on all sides. Dumber economic mistakes have been made throughout history (eg the pre great depression trade / tariff wars).
It won't raise any questions. Europeans love their fake internet censorship "right to be forgotten".
They can’t “break up” Google, it’s an American company! it’s not based there.

That's never stopped the US government...

When did the US break up foreign companies via DOJ anti-trust?
IIRC, the US has forbidden the merger of foreign companies with significant US subsidiaries. (As has the EU for US companies with significant European presence.)

Sorry, I can't give you any examples off the top of my head...

china also can't do anything to google, and yet... the chinese option is most definitely worse than status quo, but it technically can be done.