Google's legal problems go global after Canadian high-court ruling

Key Points
  • Canada's Supreme Court says Google must remove certain search results not just in that country, but everywhere.
  • The sweeping ruling, which alarmed privacy advocates, came one day after the EU hit U.S. internet giant with a record $2.7 billion fine.
  • Next, the EU is going after Google for its "Android strategy."
Eric Schmidt, chairman of Alphabet Inc. and Larry Page, CEO and Co-founder of Alphabet enter Trump Tower ahead of a meeting of technology leaders with President-elect Donald Trump in Manhattan, New York City, U.S., December 14, 2016.
Andrew Kelly | Reuters

One day after the European Union slapped a record fine on Google, Canada's Supreme Court added to the company's growing list of legal and regulatory setbacks.

In upholding a lower ruling in British Columbia, the court ruled 7-2 that Google must remove certain website listings from its search results — not only in Canada but everywhere it operates.

The decision came even though Google had volunteered to remove over 300 websites from its listings after one Canadian company, named Equustek Solutions, won a default judgment against another firm there, Datalink Technology Gateways, for allegedly misappropriating its products and trade secrets.

The sweeping ruling was alarming not just for Google parent Alphabet but for U.S. free-speech groups like the Electronic Frontier Foundation, which said it was at odds with the U.S. Constitution and "has troubling implications for free expression online."

And the potentially-onerous decision, like the $2.7 billion EU fine, was not the only bad news for the U.S. internet giant this month.

In just the past two weeks, Google has had to respond to increased pressure on everything from privacy to terrorism by:

  • Creating a four-point plan for keeping terrorist content off its YouTube video service;
  • Agreeing to remove private medical records from search results;
  • No longer scanning Gmail content for the purpose of serving targeted ads next to emails (although it's still placing ads based on other data;)
  • And saying YouTube would join , and in the new Global Internet Forum to Counter Terrorism.

In reply to an email seeking comment on the Canadian ruling, Google said "we are carefully reviewing the court's findings and evaluating our next steps."

Perhaps most ominously, the EU regulator who slapped it with the $2.7 billion fine for favoring its comparison-shopping service, competition commissioner Margrethe Vestager, is not close to done with Google.

Bad news for Google's "Android strategy"

In a diagram accompanying the EU statement detailing the record fine, Vestager outlined her main accusations against Google on a product that's key to its mobile ad efforts.

In a graphic, titled "Commission concern: Google's Android strategy to protect its search engine on mobile," the EU charges that:

  • The Google Play Store can only be pre-installed using Google search or its Chrome browser;
  • Google pays phone makers and wireless carriers "not to install other search engines" on their devices;
  • And bans them from using alternative, non-approved versions of Android, called forks.

Unlike the shopping service, which contributes less than 30 percent of Google's EU revenues, Android is a major driver of Google mobile ad sales.

Last week Alphabet executive chairman Eric Schmidt went to the White House for a meeting with President Trump and softened him up by praising his pro-business agenda.

Yet Google operates around the world. In 2016, Alphabet got just over half its revenue, or 53 percent, from outside the U.S., according to its annual 10-K filing.

If the company wants to reverse the tide of restrictions rising against it and keep growing overseas, Schmidt and other Googlers may need to spend a lot more time not in Washington but in Brussels, Ottawa and other world capitals.