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

the European Sting Milestones

Featured Stings

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

We can feed the world in a sustainable way, but we need to act now

European Youth Forum demands immediate action & binding agreement on climate change

Greece’s last Eurogroup or the beginning of a new solid European Union?

Trump’s Syrian hit the softest option vis-a-vis Russia

Doctors are humans too: the benefits of embracing your mental status

Greece lost a month that cannot be found neither in “mini Summits” nor in Berlin

5 ways for business leaders to win in the 2020s

Commission calls on Leaders to pave the way for an agreement on a modern, balanced and fair EU budget for the future

What the next 20 years will mean for jobs – and how to prepare

6th Edition of India m2m + iot Forum 2019 concluded, in association with The European Sting

COP21 Breaking News_08 December: Cities & Regions Launch Major Five-Year Vision to Take Action on Climate Change

Trump systematically upsets global order and trade: Where does this end?

Give a chance to the brothers of Ailan: reception of refugees in Greece

Indonesian tsunami death toll climbs over 400 as Government-led relief efforts are stepped up

Mental health in medical students: the deciphered quandary

Do we have to choose between creating jobs and protecting the climate?

Breaking news on European Youth Employment: European Youth Forum Guide tackles poor quality internships!

They won this year’s Nobel for economics. Here’s why their work matters

Eurozone: Disinflation engulfs the industrial goods sector

‘Many challenges to overcome’ at UN, in fight against abuse: victims’ advocate

Be a part of the World Forum on Future Trends in Defence and Security

Consumer protection: Deal on EU-wide rules for those sold faulty products

EU adopts retaliative measures in response to US steel and aluminum tariffs

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

Gas pipeline in the European Union. (Copyright: EU, 2012 / Source: EC - Audiovisual Service / Photo: Ferenc Isza)

EU Investment Bank approves € 1.5bn loan for Trans Adriatic Pipeline (TAP)

Brain Drain remains a crucial and unresolved issue

Anti-vaccination: a private choice leading to collective outcomes

‘Worst devastation I have seen,’ says UN refugee envoy Angelina Jolie, as she visits West Mosul

How Germany strives to mold ECB’s monetary policy to her interests

MWC 2016 LIVE: Stripe gives payments leg-up to startups in emerging markets

Nokia wins Commission’s approval for Alcatel-Lucent acquisition: a new way for antitrust cases?

Texting is a daily source of stress for 1/3 of people – are you one of them?

To all far-right partisans who exploit Charlie Hebdo atrocity: a peaceful reply given by a peaceful student

China-EU Relations: Broader, Higher and Stronger

Who should be responsible for protecting our personal data?

On youth unemployment: unemployment is even bleaker for youth with disabilities

CO2 emissions on the rise for first time in four years, UN agency warns

GSMA Announces Speakers for Mobile 360 – Russia & CIS 2018

Healing of ozone layer gives hope for climate action: UN report

This is what happens when a school swaps french fries for quinoa

The two big uncertainties shaping our future

The European Brain Drain: hard facts and harder truths

EU adopts rebalancing measures in reaction to US steel and aluminium tariffs

Eurozone: Retail sales betray economic frailty

The vehicles of our future

This is how travel hotspots are fighting back against overtourism

A European student just sets the question of the day: What kind of education policies are missing in Europe?

Eurozone: The crisis hit countries are again subsidizing the German and French banks

Yemen talks: Truce agreed over key port city of Hudaydah

Romanian Presidency priorities discussed in committees

Human traffickers in Libya are posing as UN staff, says Refugee Agency

This project in India helps people and tigers co-exist peacefully

Humanitarian Aid 2016: The needs, the highlights, the crisis and the relief

EU27 leaders unite on Brexit Guidelines ahead of “tough negotiations” with Theresa May

Remembering Kofi Annan

Sudan: UN rights chief alarmed over ‘excessive force’, alleged use of live fire against protestors

Why Europe’s high productive performance is discredited?

The AI moment: preparing for the revolution

Islamophobia is driving more US Muslims to become politically engaged, suggests report

YO!Fest back in Strasbourg for the 2nd edition of the European Youth Event – 20-21 May 2016

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