Taking on Google is the Madisonian way

I love Google. As a writer, I use it regularly to check my facts and choose my words. As a middle-aged man no longer made for his times, I often turn to its YouTube video-sharing service for comfort, watching clips of the Ronettes and the Ramones, or The Beatles before they had facial hair, when I need respite from the 21st century.

Nevertheless, I was pleased this week when the EU antitrust regulator took aim at the California company, accusing Google of using its dominant position in search to steer customers to its in-house shopping services, and opening an investigation into its Android mobile platform to see if it is designed to force wireless companies to use its software.

While it remains to be seen whether the EU can prove its case, I admired its pluck in standing up to a company as rich, powerful and respected as Google. As odd as this might sound, it seemed to me that the bureaucrats in Brussels were behaving in the American way - the one set forth by our founding fathers when they gave King George III a kick in the pants and created a republic.

If there is one thing the leaders of our revolution feared, it was the concentration of power. They had pledged their lives, their fortunes and their sacred honour to defeat tyranny, and when they won a chance to set up their own government, it was based on a system of checks and balances designed to prevent any particular interest group - or "faction", to use their term - from growing so strong that it could harm others.

Being Americans, they worried in particular about economic rivalry. As James Madison, our fourth president, put it: "The most common and durable source of factions has been the various and unequal distribution of property." Nations have debtors and creditors, "a landed interest, a manufacturing interest, a mercantile interest [and] a moneyed interest", he wrote, adding: "The regulation of these various and interfering interests forms the principal task of modern legislation."

However, meeting our republican responsibilities hasn't been easy in the part of the US called the Silicon Valley. The underlying problem there is that the people who run our big technology companies are, in fact, superior beings. They know a lot more than the rest of us, and they have been creating wealth on a scale that boggles the lesser mind.

Google was operating out of a garage in 1998; its market value now stands at about $360bn, a sum greater than the gross domestic products of countries such as Malaysia and Israel. Business successes of this sort don't happen very often, even in nations blessed by God, and that obviously gives US regulators pause when it comes to the technology sector. It isn't good politics to step on a goose laying golden eggs.

However, as US regulators have hemmed and hawed in the manner of high-tech Hamlets, their European counterparts have acted, training their fire first on Microsoft in the 1990s and now on Google. It is almost as if Brussels has emerged as a fourth branch of the US government, responsible for regulating technology companies over here.

This is obviously not the best of all possible worlds. The argument could be made that if the Europeans knew so much about technology they would be running big internet companies of their own rather than bothering ours. Also, local regulation is usually the best regulation, as the US Constitution recognises.

But foreign intervention of this sort might be the best that a modern Madisonian can expect. As our economy grows more global, it could prove to be the case that outside regulators are simply in a better position to stick their noses into businesses of other countries.

Indeed, as the US has outsourced much of its technology regulation to Europe, Europe has come to rely to a significant extent on regulators in the US in general, and in the city and state of New York in particular, to keep many of its big banks on the straight and narrow.

A classic example came last June when BNP Paribas of France reached an agreement to pay $8.9bn for violating US sanctions against doing business with Sudan, Iran and Cuba. The bank aided the regime in Sudan, even though one of its managers described the war-ravaged region of Darfur as a "humanitarian catastrophe" in correspondence that was disclosed by US prosecutors.

At the time, French officials reacted with horror. Francois Hollande, France's Socialist president, called the penalty "disproportionate"; while other members of the country's establishment mused about the decline of the US dollar as the world's reserve currency.

But, in the end, the US authorities were doing France a favour. If their bankers can't find anything better to do than help regimes as foul as the one in Sudan, they aren't very good bankers and should reassess their career opportunities before they are too old to find suitable employment.

Similarly, if the EU accusations prove correct and Google is using improper tactics to win business from others, it would be better for all concerned - at the company and the country in which it has prospered - to find out sooner rather than later. As we taught King George III back in Madison's day, this country is no place for a bully.

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