Google defeated a rival in Prague. The refund could hurt

PRAGUE (NYTIMES) — As Google has extended its dominance as a search engine over the past two decades, the Czech Republic has emerged as a surprising resistance.

People in the European nation preferred Seznam, a search engine launched in Prague in 1996, two years before Google. For roughly 15 years, Seznam’s focus on its local market has provided a feel-good story about a hometown underdog prevailing against a rising global titan.

But when smartphones became commonplace, most of them with Google installed as the default search engine, Seznam’s luck ran out. Google now controls more than 80% of the Czech search market, and Seznam is a marginal, more media-oriented search engine.

Since his fall, Seznam has continued to be a thorn in Google’s side, including when he joined a lawsuit against the US search giant that led to a record fine. Today, it is also helping to inspire laws aimed at reducing the power of companies like Google, with consequences that reach far beyond the Czech Republic.

European lawmakers are putting the finishing touches to a law aimed at protecting companies like Seznam by preventing big tech companies from unfairly bundling services to exclude rivals. The legislation would require Google and other tech giants to make small business services more easily accessible to users.

The new rules, which are expected to be passed by June, would affect how Apple and Google operate app stores, Amazon sells products online, and Meta and Google sell online advertising. The debate in Europe is being watched closely in countries like the United States, where the Department of Justice and the Federal Trade Commission have also proposed updating competition rules targeting the world’s biggest tech companies.

This flurry of new regulations is a sign of global concern that some companies have reached such scale that new competitors cannot emerge, giving platforms outsized influence over business and society. The internet, once seen as a decentralized medium for a constellation of companies to reach users around the world, is controlled by a dwindling number of giant corporations. There is less room, policymakers fear, for small businesses to thrive.

“We are an example of the consequences,” said Mr. Michal Feix, former managing director of Seznam, who now directs its policy and legal work as an outside consultant. Without the new laws, he said, “you just can’t compete.”

Google said its success in the Czech Republic was the result of delivering superior service. Czechs “choose our products because they help people find the information they’re looking for — and because we make thousands of improvements every year,” Google said in a statement.

In the Czech Republic, the history of Seznam goes back to the beginnings of enthusiasm for the Internet. Mr. Ivo Lukacovic, the founder and owner of Seznam, recalled a childhood without much money; his family had no car or color television. As a teenager in 1989, when the country was still part of Czechoslovakia, he joined his classmates in mass protests, known as the Velvet Revolution, which helped bring down the ruling Communist Party.

“The regime has collapsed and the era of economic freedom has begun,” Mr Lukacovic said on a recent windy morning outside Prague. “Since I was playing with computers, I went to college.” At 22, he left the Czech Technical University in Prague after creating Seznam, which means “list” in Czech. It started as a recommendation site of about 10 Czech websites to visit. A search engine was added in 1998; e-mail, cards and other services arrived in the years that followed.

The company continued to grow after Google opened in the country in 2006. Seznam’s search engine was tailored to Czech speakers and added services such as unlimited email storage to track Google offers.

In 2008, the Czech Republic, whose population of 10.5 million is roughly the size of North Carolina, was the only place in the European Economic Area of ​​31 countries where Google was not the main search engine.

In 2010, Seznam’s position began to change. Google had invested heavily in improving its non-English language services and had tried to endear itself to Czech citizens through efforts such as digitizing ancient books housed in the 18th-century baroque library in the old city ​​of Prague.

But Seznam sensed something more devious was at work.