How Europe’s Data Regulation Is Affecting Google’s Competition

Alphabet’s (GOOGL) Google dominates the global search engine market. In Europe, it held 93.6% of the region’s search engine market at the end of October, according to StatCounter data, whereas its closest competitor, Yandex (YNDX), held 2.3%, and Microsoft (MSFT) held 2.1%.

However, the coming into force of Europe’s comprehensive data privacy law, the General Data Protection Regulation (or GDPR), seems to be fueling more competition against Google. The GDPR took effect on May 25. Across the continent, smaller search engine companies have been taking advantage of the GDPR to challenge Google for a share of a market where privacy is a sensitive issue.

The GDPR restricts the amount of data companies can collect about people’s online activities and what they can do with that data. The adoption of the GDPR led Facebook (FB) and Twitter (TWTR) to update their terms of service in a bid to comply with the privacy law. Companies risk hefty fines of up to 4.0% of their annual global revenue if they violate the GDPR.

Internet companies, including Google and Facebook, are known to leverage data insights about how people use their products to refine their offerings by delivering more relevant search results or marketing messages. However, the smaller search engine companies that have emerged in Europe to challenge Google say they don’t track people’s browsing activities or filter search results, in an attempt to appeal to people’s desire for privacy.