Silicon Insider: Why Google Can't Do Gmail in Europe

March 21, 2008 — -- To paraphrase Carl von Clausewitz, economic war is also politics by other means -- especially in the European Union.

As you may have read this week, the Trademark Agency of the European Union, located in Luxembourg, denied Google's bid for the right to use within the EU the name of its popular e-mail program, Gmail.

It seems that there is a company in Germany called P1 Private that offers a service that lets users send files and messages through a central e-mail system -- it's called G-Mail, for its founder Daniel Giersch. G-Mail was created in 2000; Gmail in 2004.

Despite Google's argument that the two services have little to do with one another, that the two logos look very different and that P1 Private's G-Mail logo also includes a tag line that translates as "… and the mail really takes off," the Trademark Agency ruled for P1, saying that there was too great a "likelihood of confusion."

In doing so, the agency upheld a similar decision by a lower board in January.

Google will, of course, appeal (I assume that throwing money at Herr Giersch has failed), but at this point the odds are getting very long. Indeed, I would go so far as to say that Google, just by being Google, never had a chance.

You or I, looking at this case from the perspective of the entrepreneurial United States might find all of this a little confusing.

G-Mail, with likely a few thousand users, and Gmail, with millions, don't seem to directly compete, so what's the problem? On top of that, why Herr Giersch doesn't just take the big bucks/marks from Google -- heaven knows it has them -- change the name and laugh all of the way to the bank? Or, at least, drop the suit and enjoy the millions it will make in publicity and wayward customers that confuse the two names?

Ah, but that's thinking like an American.

When we see a pie and conclude that our slice is too small, we typically come up with one of two strategies: make the pie bigger (sector expansion, usually through innovation), or bake a whole new pie (entrepreneurship).

Europeans by comparison, and with a few exceptions, almost always settle upon two very different strategies: either wheel and deal to make your slice a little bit bigger (mergers and partnerships) or limit the number of people allowed to eat pie (protectionism). And when it comes to the latter, one of the most common ways to do that is to keep out the bloody Americans.

This always seems to surprise U.S. companies when they do business in Europe. They assume that the competitive situation is just like here, except perhaps with better food and worse dentistry … and then they get blindsided by virulent attacks in the European media, bizarro world lawsuits and new regulations aimed directly at them, and, in the case of McDonald's, even getting their stores set ablaze. Mickey D's as the symbol of American hegemony … wait, what?

All of this leaves us Americans scratching our heads. Take the case of Microsoft. Most of us in the tech world were pretty terrified of Gates and his Evil Empire in the 1990s, mainly because nobody seemed to be figuring out a way to effectively compete with that business juggernaut.

But most of us also got over that fear somewhere around 1998, when we realized that personal computer operating systems, even Web browsers, were being eclipsed in importance by Web content, e-commerce and Internet applications.

And these days, when Microsoft most resembles a faded old movie star still trying to conjure up the past, that fear has mostly turned to ridicule, when the company isn't simply ignored.

But that's here. In Europe, keeping with that age-old principle that the enemy who isn't at your feet is at your throat, they've never moved on.

That's why I think it was so surprising to us Yanks when, in 2004, the European Commission handed down an anti-trust ruling against Microsoft demanding that it make available to "open source" software developers all interoperability information regarding its "work group server operating systems." Who cared anymore?

Other than the usual folks who believe all successful corporations are evil, the few U.S. techie types who applauded this decision did so tepidly. After all, did we really want the competitive landscape determined by a bunch of bureaucrats in Brussels? And when, in January, four years later, the EU forced Microsoft to pay $1.3 billion in fines and open 30,000 pages of proprietary interface and protocol information, it all seemed both churlish and old news -- like suing Graf Zepplin in 1960 for its one time monopolistic behavior in the dirigible industry.

The circus had already moved on, but not for the European Union. With Microsoft already on the mat, the European Commission moved to take it out of the game forever. It failed, but less from will than lack of competence. Does anyone doubt that it would have broken up Microsoft if it had the power?

Why the virulence? Because Microsoft represented to the EU the unholy trilogy: It was a near-monopoly (not in itself a bad thing), it was in technology (where Europe was losing ground) and it was American (the clincher). Had Microsoft been based in, say, Frankfurt, the European Union would have been subsidizing it, not suing it. Frankly, had Microsoft been headquartered in St. Petersburg or Beijing or Bombay it still might have gotten a slap on the wrist. But not Redmond, Wash., U.S.A.

I got a glimpse of this attitude at the beginning of the decade when I was in the United Kingdom for my annual Oxford event. There, the anger toward, and the fear of, Microsoft was palpable, and no amount of my dismissing that company's future competitive threat, did anything to allay those emotions. Microsoft had to be stopped, by any means necessary. And the subtext was: We simply cannot allow the Americans to have this much power over any part of our lives.

Now it's Google's turn. I saw this one coming two years ago, and I could have told you ahead of time just how this Gmail case would turn out.

The first time I encountered Europe's fear of the Google boogeyman was a couple years ago at the same Oxford event. There, the editor of the Guardian, that in-house newsletter of all things anti-American, got up and asked one of the panelists, a Google vice president, just what Europe could do to stop him.

It sounded like a typical snarky U.K. media question, but behind it was something more ominous. At any given moment, some fast-moving and dynamic U.S. company is chosen as the locus of all that Europe fears about American entrepreneurship, power and confidence. And from that moment forward it would be Google … and the EU would bring everything to bear to crush it: subsidized home-grown competitors, targeted regulations to circumscribe its efforts, and, when all else failed, a trial before some Brussels tribunal.

Mark my words: That's the fate already in store for Google in Europe … unless some other U.S. corporate bete noire can be found.

Google had better start hiring European attorneys, building a war chest and schmoozing bureaucrats, because the war has just begun. And the EU won't quit until Google, like Microsoft before it, is brought to heel.

This is the opinion of the columnist, and in no way reflects the opinion of ABC News.

Michael S. Malone is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News, as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, the Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNEWS.com Silicon Insider columnist since 2000.