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.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

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

Ambassador Zhang Ming: “Work Together for a Better Globalization”

G20 LIVE: World Leaders in Turkey for G20 Summit. Global Economy will be discussed in Antalya

104 countries have laws that prevent women from working in some jobs

Yemen hospital airstrike under investigation amid resurgence of deadly cholera

Brexit: PM May must hush Boris Johnson to unlock the negotiations

Anti-vaccers: does the empty can rattle the most?

This is the critical number that shows when housing breaks down

Trump wants to implicate China in US attacks against global order

Wednesday’s Daily Brief: Diplomacy for Peace Day, #VaccinesWork, the cost of war on Afghans, tech and well-being

Here are four ways ASEAN can help entrepreneurs thrive – especially women

‘BioSolar Leaves’ are better at cleaning the air than trees, say the technology’s developers

This AI-powered app aims to help people with autism improve their social skills

Opposite cultures: Should it be a problem?

Why CFOs need to rethink what it means to create value

A Sting Exclusive: “Delivering on the Environmental Dimension of the new Sustainable Development Agenda”, Ulf Björnholm underscores from UNEP Brussels

Girls groomed for suicide missions fight back against the extremists of Lake Chad

EU and Indian flags at EU-India Summit in New Delhi last October (copyright EU 2018, Source: EC - Audiovisual Service)

India and the EU get close to revive talks on proposed Free Trade Agreement

Commuters in these cities spend more than 8 days a year stuck in traffic

Senior UN adviser sees ‘rare’ victory for humanitarian diplomacy as aid convoy reaches desert camp in Syria

Tourism offers much to the EU gets a little

Is Data Privacy really safe seen through Commissioner’s PRISM?

Agreement reached on screening of foreign direct investment for EU security

3 charts that show the economics of European football

Brexit negotiations: Can May’s Britain bounce back?

DR Congo Ebola centre attacks could force retreat against the deadly disease, warns UN health chief

This cheap, 700-year old solution could change billions of lives

EU Commission: Growth first then fiscal consolidation

UN-led Yemen ceasefire monitoring team gets ready to begin operations

GSMA Mobile 360: Connecting Cities, Connecting Lives, Connecting Europe

UN pushes for universal health care on International Day

The inhumane face of crisis mirrored in numbers

Apple® logo (copyright: Apple)

Apple takes further step into music: EU Regulators formally approve its planned Shazam acquisition

How to fight back against misinformation and polarization

Austerity lovers and ‘relaxationists’ fight over the EU budget

The umpteenth Italian overturn takes Renzi and PD to unprecedented victory at EU elections

A silent killer: the impact of a changing climate on health

A Sting Exclusive: “The EU Cybersecurity Act for a more secure and cyber-resilient European Digital Single Market”, by EU Commissioner Gabriel

First Western Sahara talks at UN in six years, begin in Geneva

Finnish Prime Minister calls for a more united EU of concrete actions

Macro-Financial Assistance: Europe’s way to control Ukraine?

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

Action needed to tackle stalled social mobility

Sweden to reach its 2030 renewable energy target this year

Capital Markets Union: Making it easier for insurers to invest in the real economy

The Parliament defies a politically biased Banking Union

Mental health in medical students: the deciphered quandary

16 foods that are good for you – and the planet

Technology can help solve the climate crisis – but it will need our help

The European Parliament hemicycle in Strasbourg (Copyright: European Union, 2017 / Source: EC - Audiovisual Service / Photo: Mauro Bottaro)

EU Parliament sends controversial copyright law reform back to discussion

EU approves disbursement of €500 million in Macro-Financial Assistance to Ukraine

How much more political is the new EU leadership? Does this include personal bend?

The unique role of business in building social good

‘Regional security and integration’ in Central Africa under threat, Security Council warned

The most unlikely innovators are changing ICT for development – it’s time we took notice

How tiny countries top social and economic league tables (and win at football, too)

Remembering Kofi Annan

A Europe that Protects: Commission calls for more efforts to ensure adoption of security proposals

How to end overfishing in the global South

ECB’s first flight in Eurozone’s banking universe will be just a reconnaissance

European Citizens’ Initiative: A game of much publicity and one big lie

More Stings?

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