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Report: Google lobbies furiously to influence impact of Europe’s coming Digital Markets Act

Report: Google lobbies furiously to influence impact of Europe's coming Digital Markets Act
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Google LLC is said to be ramping up its lobbying efforts in the European Union as it is making a “final effort” to limit the impact of a proposed Digital Markets Act that is expected to become law later this year.

Google, along with other major technology companies such as Apple Inc. , to participate in talks with EU lawmakers about the DMA in November 2020. However, these talks were not taken seriously, as the EU had already finalized its proposals beforehand.

Progress on signing the DMA into law has been slow, but the Financial Times reported today that it now appears to happen sometime this year. This is a concern for Google, as some of its proposals aim to reduce the power of so-called “gatekeepers,” who are defined as technology companies whose platforms dominate the online economy. Last week, Germany’s competition watchdog officially designated Google a “gatekeeper,” leaving it more vulnerable to strict local supervision than before.

This decision reportedly prompted Google to launch an angry lobbying campaign, seeking to drop the legislation or at least limit the impact it might have.

“California’s top executives have known about DMA all along, but only now have they woken up,” a Google insider told the Financial Times.

Google executives are said to be concerned that DMA rules will prevent it from promoting the main businesses it operates, such as travel and hospitality services, via search engine results, a practice known as “self-preferring.”

Thomas Hubner of German law firm Hausfeld told the Financial Times that DMA could force Google to fundamentally change the design of search results pages.

DMA is designed to increase competition and focus on dominant US companies such as Google and Facebook, Enderle Group analyst Rob Enderle told SiliconANGLE. It is noteworthy, he said, that European lawmakers seem more resistant to lobbying efforts than their American counterparts, especially when that pressure comes from American companies.

“It seems they have a mission to weaken American companies to advance European interests,” Enderle said. “Google appears to be the most effective initial test case, and if the results are favorable for the EU, expect this ruling to be used against a larger group of companies shortly after that.”

Holger Muller of Constellation Research Inc. said: Dynamic Mechanical Analysis (DMA) will have far-reaching consequences for the regulatory oversight of tech companies within the European Union, and could also rewrite the definition of competition as we know it.

“By designating the vendor as a ‘gatekeeper,’ EU regulators will be able to force more openness to platform providers,” Mueller said. “So Apple may have to offer apps in its market that do not require payment for them.”

Most surprising, the analyst said, is how most of the tech giants in the US, as well as the US government, have been very quiet about DMA.

He continued, “The DMA also contains a nuclear option clause that allows it to split tech giants who do not comply.” “It remains to be seen how this turns out, but the only thing we know is that it will definitely slow down some of the tech giants.”

Such dire consequences seem to explain why Google now appears to be ramping up its lobbying effort, with several EU diplomats and politicians reporting seeing dozens of ads with the message that the company’s restriction will hurt small businesses in Europe, the Financial Times reports.

“Please don’t make it more difficult for my business,” read part of one message sent by the Connected Trade Council, a lobby group partnering with both Google and Amazon.com Inc.

Dutch MEP Kim van Spartak told the Financial Times she had seen a “notable escalation” of pressure from Google. Among other things, she stated that she received an invitation from Google to discuss her views on DMA at a time of her choosing, and was invited to an event organized by the company to promote the benefits of digital marketing for small business.

Another EU diplomat, who was not named, told the Financial Times his feed was “in a state of superiority”.

Another group that also includes Google among its members, IAB Europe, has started a campaign against the proposed DMA ban on advertising targeted with its own targeted ads. Unfortunately for Google, its efforts were not appreciated by EU policy advisor Alderik Oosthoek:

Andreas Schwab, the European Parliament member who is leading the push for the DMA to become law, told the Financial Times that Google’s efforts are “a little too late” to have a major impact on the new legislation. “I have a feeling they are concerned, and they should be,” he said.

When Google was asked to comment on its lobbying campaign, it responded via its spokesperson that it believed Europeans should be able to enjoy the best services the company could build, adding that it was concerned that some of the DMA’s proposals could harm its ability to innovate its products in Europe.

“We care about getting the balance right, and we know our users and customers care too,” the spokesperson said. “Like many others, we engaged openly and constructively with policymakers throughout the legislative process to make our point.”

Photo: Bru-nO/Pixabay

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