Brussels Vs. Google: The €1 bn EU fine and the US response

Press conference by Margrethe Vestager, Member of the EC, on the Review of the State aid General Block Exemption Regulation
Date: 17/05/2017 Location: Brussels – EC/Berlaymont
© European Union Source: EC – Audiovisual Service Photo: François Walschaerts

The European Commission is about to impose more than one billion euros fine to Google as a result of online shopping service search abuse according to the Financial Times. If the above is implemented, it would be the highest penalty in the history of anti-competitive behavior after Intel’s case in 2009.

The repercussions for Google, except for the financial impact, would be to cause serious changes to the multinational’s business plan. Therefore, the tech giant is most likely to take the case to the European courts in order to avoid implementing such alterations.

Alphabet, the parent company of Google, has been losing as its stock’s price fell since last Thursday when the latter was published. However, it seems that it bounces as the market is coming back to normal waiting for the official announcement by the EC in the coming weeks.

The main point though would be the response of the U.S. to the current developments regarding Brussels’ antitrust enforcement to the American company. Will U.S. publicly criticize the EU for charging Google with abuses of market dominance?

EC shows its teeth to the tech giant

The Commission is most likely to impose one billion euros fine to Google by the end of August showing that the EU eventually “punishes” market dominance in online shopping search even after seven years of investigation. Google’s antitrust case has been under investigation for a long time now with no agreement reached for none of the three charges. Thus, the financial penalty that is about to be enacted for one of them moves forward the investigations.

However, the U.S. firm is about to appeal against it in European courts which may delay the decision. Kent Walker, Google’s general counsel, had said last November in a blog post that the EC “lacks evidence and its claims are wrong as a matter of fact, law and economics”.

Will Google be affected?

Alphabet has the money to pay for the fine, which will probably be imposed, as it held more than 90 billion dollars of total revenues at the end of March. Furthermore, Google´s stock fell after it was known that that it will have to pay 1 billion euros as a fine for its online market abuse but manage to regain its losses as the stock market return to normal.

However, one of the major problems for the tech multinational is how it will manage to cope with its online operations which will have to change and adapt to the European standards. The worst case scenario though would be to be fined for the way it limits mobile phone providers who use its Android software. If the latter is materialized, then Google’s risk will be extremely high as 79% of EU people access internet through their smartphones which mostly operate Android software.

U.S. will not criticize EU’s decision on Google

The United States is most likely not going to respond negatively either publicly or behind the scenes regarding the EU stance on the antitrust case of Google. Makan Delrahim who is a President’s Trump nominee for the position of U.S. Assistant Attorney General for Antitrust stated, when asked about the proper role for antitrust in a high-tech economy, the following: “Antitrust has a vital role to play in the high-tech, ecommerce economy to protect consumers. Actions by firms that threaten competition in the high-tech, ecommerce economy, whether by merger or conduct, should be investigated and pursued if the investigation uncovers an antitrust law violation.”

Moreover, when Google’s case began in 2011, both the U.S. Department of Justice and EU were on the same side opposing to the tech firm. Google has been given several chances to defend itself and to come up to a mutual agreement with the European Commission. It even has the chance to go to the EU courts to reverse the situation even if the judges of the EU Court of Justice have never overruled the EU antitrust authority before.

All in all, Google’s antitrust case is progressing with the EC to start imposing high record fines to the tech company discouraging any company to follow Google’s path while U.S. stays uninvolved. However, Google will not fall without a fight as its business strategy highly contradicts EU’s antitrust policies. It seems that this case will keep on for several years if Google decides to take it to the EU Courts of Justice.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The sustainable fashion revolution is well underway. These 5 trends prove it

With rapid, far-reaching changes, world can prevent climate change worst-case scenarios – UN chief

The ‘American Dream’ can be best achieved in the Nordic nations, says Finland’s PM

Venezuela: MEPs demand free presidential elections and an end to repression

UN, global health agencies sound alarm on drug-resistant infections; new recommendations to reduce ‘staggering number’ of future deaths

Cyprus President urges collective leadership to address ‘root causes’ of world’s crises

Women Win in the West

Our idea of what makes a company successful needs to change. And it starts with making waste expensive

What do the economic woes of Turkey, Argentina and Indonesia have in common?

Draghi: Germany has to spend if Eurozone is to exit recession

Should we be worried about third-hand smoke?

4 eco-friendly products put sustainable spins on classic practices, from teacups to hankies

Can privatisation be the panacea for the lack of growth in Europe?

One in three Venezuelans not getting enough to eat, UN study finds

How AI and machine learning are helping to fight COVID-19

IMF: World cup and productivity

4 ways digitisation can unlock Africa’s recovery

Somalia: UN Security Council condemns terrorist attack in which dozens were killed or injured

UN agency assists Central American caravan migrants, voices concern for receiving countries

JADE Generations Club: Connecting perspectives, changing Europe.

We are on the edge of a new ‘cyber’ space age. This is how we make it a success

On sidelines of UN climate summit, US President calls for protection of religious freedom

The future of crypto-assets, from opportunities to policy implications

This app uses augmented reality to rewrite ‘herstory’

7 top things to know about coronavirus today

UN chief praises Malaysia’s death penalty repeal as ‘major step forward’

Political solutions ‘prerequisite to sustainable peace’, Lacroix tells Security Council

Building an Inclusive ICT Innovation Ecosystem

Wednesday’s Daily Brief: mental health, conflict prevention, Ebola in Uganda, Sudan protests, child labour

How technology and play can power high-quality learning in schools

‘Our goal is to democratize the air.’ How aerial transportation will shape cities of the future

Force used against protestors in Gaza ‘wholly disproportionate’ says UN human rights chief

Mexico cannot move forward ‘without addressing the shadows of the past’, says UN rights chief

How Africa’s women can drive the 4IR forward

Spotlight Initiative – EU and UN fight against domestic violence in the Pacific region

World Health Organization calls crisis meeting over deadly Ebola outbreak in DR Congo

Cheap sea transport with low cost seafarers

This is how we inspire young people in the Middle East to join the fight against climate change

Annual UN women activists’ summit opens with focus on services, infrastructure

Researchers have invented a brick that can build itself

The impact of COVID-19 on the life of the elderly

What can each individual do to lessen the burden of mental health in times of the pandemic?

JADE President opens JADE Spring Meeting 2014

A year on from Yemen talks breakthrough, top UN Envoy hails ‘shift’ towards peace, despite setbacks

Crowdfunding: what it is and what it may become

Easing funding woes for UN agency assisting Palestine refugees a ‘wise investment for today and the future’

New EU rules to boost crowdfunding platforms and protect investors

Draghi: A bridge from Brussels to Berlin

Why do US presidential elections last so long? And 4 other things you need to know

Constitutional Committee breakthrough offers ‘sign of hope’ for long-suffering Syrians

Saudi Arabia: UN experts push for prompt release of women human rights defenders

This is what’s happening to the Amazon, according to NASA

Africa is facing a food crisis due to COVID-19. These seeds could help prevent it

The Great Reset requires FinTechs – and FinTechs require a common approach to cybersecurity

Member States’ compliance with EU law in 2019: more work needed

Chinese Premier Li Keqiang’s speech from World Economic Forum’s Annual Meeting of New Champions

5 reasons why biodiversity matters – to human health, the economy and your wellbeing

5 lessons for social entrepreneurs on how to change the system

Consultant in Forensic Technology – 1969

UN condemns deadly attack on Burkina Faso church

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s