Cornelius Rahn, Brian Parkin and Stephanie Bodoni Berlin and Luxembourg
GOOGLE chairman Eric Schmidt recalls how during a meeting with Angela Merkel in June, the German chancellor pulled out her phone and asked him what US spies were doing listening to her calls with her mother.
“That’s how personal this felt,” Schmidt said during a panel with US Senator Ron Wyden last week. “We’re dealing with emotion and history and things well beyond our intent.”
Concern about Google’s market power and expanding reach into markets such as the car industry have mixed with fears of US cyber espionage to make the company the focal point of mistrust among European politicians. Schmidt chaired a panel in Berlin yesterday discussing the removal of search entries following a recent European court ruling.
Schmidt was expected to meet German Economy Minister Sigmar Gabriel last night. He was hoping to sway his interlocutor to refrain from measures that would curb Google’s business in the region.
“One talk alone won’t solve the problems posed by Google – they’re too multi-layered,” said Joachim Pfeiffer, the parliamentary economy spokesman of Merkel’s Christian Democrats. “Still, talking’s better than not – we need to find a basis for mutual understanding.”
German concern that Google may come to dominate what has been dubbed “Industry 4.0”, or next stage internet-based industrial development, has added to the tensions between the Californian-based company and Europe’s biggest economy. Industry accounts for about 40 percent of Germany’s economic output.
“Industry 4.0 is an issue,” said Pfeiffer, citing Google’s move into home energy consumption metering. The digitalisation of production will have “revolutionary” impact, Siemens, Europe’s biggest engineering company, says on its website.
The German government was not envious of Google’s success, said Hans Michelbach, a Christian Social Union legislator and spokesman for the “Mittelstand” – the medium-sized companies that are the backbone of the economy. Google’s “oligarchical” position in the Web economy was squeezing fair competition, Michelbach said on Monday.
By advancing its views in Germany, Google would gain leverage in other parts of Europe as well, given the country’s economic weight and its political role in shaping EU rules.
Gabriel may prove a brusque conversation partner. The head of Germany’s Social Democratic Party in May discussed the possibility of dismantling companies like Google if they were found to abuse a dominant position in the market.
Last month, he called Google, Amazon.com and Apple “anti-social” for skirting appropriate taxation.
“Germany has been a hotbed of difficulty for Google, featuring some of Google’s most vocal critics in Europe,” Greg Sterling, vice-president of strategy and insights for US trade group the Local Search Association, said. “Much is at stake as Google seeks to avoid formal antitrust proceedings, considerable potential fines and the stigma of being formally branded a monopolist.”
Merkel herself did not recall making the remarks to Schmidt and generally did not recount details from personal meetings, a spokesman said.
Kay Oberbeck, a spokesman for Google in Germany, said he could not confirm details of the private conversation.
The panel on the so-called “right to be forgotten” addressed whether removals of search entries should have global effect as well as what constitutes a public person who is not entitled to having information removed.
Google’s plans to settle a lengthy EU antitrust probe were derailed last month by negative feedback from companies that complain the company promotes its own services in its search results.
Deutsche Telekom, a unit of Axel Springer and German publishers are among companies that have filed formal complaints alleging Google broke monopoly abuse rules.
The company has been facing probes across Europe into changes it made in 2012 to harmonise privacy policies for more than 60 products.
Data protection watchdogs from the 28-nation EU wrote to Google chief executive Larry Page the same year, saying the company empowered itself to collect vast amounts of personal data about internet users without demonstrating that this collection was proportionate.
Regulators including those in Spain and France have fined Google over its use of customer data.
The EU’s watchdogs last month said they had reached agreement on how to tell Google “to ensure compliance of its new privacy policy”. – Bloomberg