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

Solitary Britain sides with US aggressing Russia and chooses hard Brexit

UN unveils global influenza strategy to prevent ‘real’ threat of pandemic

How technology is leading us to new climate change solutions

D-Day for Grexit is today and not Friday; Super Mario is likely to kill the Greek banks still today

Yemen conflict: ‘Fragile’ hopes rise, as violence decreases and life-saving humanitarian funding surges

3 ways to nurture collaboration between universities and industry

The patient, the doctor, the students and the overcrowded room

‘Humiliation was the worst’; Holocaust survivor at UN, asks world to act with ‘empathy and compassion’

Globalization 4.0 must provide for the poorest, or it risks causing chaos for everyone

Robots, Artificial intelligence and Dentistry

DR Congo elections: ‘historic opportunity’ for ‘peaceful transfer of power’ says Security Council

Why feeding the planet doesn’t have to mean sacrificing our forests

“Leaked” TTIP document breaks post 8th negotiations round silence and opens door to critics

Remembering Kofi Annan

Guterres in Davos: ‘Dysfunctional’ response to common problems, shows need for effective multilateralism

At G20 Summit OECD’s Gurría says collective action vital to tackle global challenges

German and French bankers looted the Irish and Spanish unemployed

New York high school students are getting free water bottles to cut plastic waste

Taxation: Commission refers Portugal to the Court for discriminatory legislation on car registration tax

These Dutch tomatoes can teach the world about sustainable agriculture

Sweden to reach its 2030 renewable energy target this year

The application that encourages us to be heroes

Africa must become more resilient to climate risk. Here’s how

Coronavirus has ‘pandemic potential’ – but what is a pandemic?

Missile strike kills at least 12 civilians, including children, in Syria’s Idlib: UN humanitarians

Electronic Cigarettes: Are they really as safe as we think?

COVID-19: Commission provides guidance on EU passenger rights

How this one change can help people fight poverty

Disillusioned young people – France thinks it has a solution

Consumers suffer three defeats

Yemen bus attack just the latest outrage against civilians: UN agencies

Arlington, USA: kick-off of the fifth round of the EU-US boxing match

UN welcomes progress in former Yugoslav Republic of Macedonia naming dispute

UN cooperation with League of Arab States ‘pivotal’, UN chief tells Security Council

Remarks by Commissioner Lenarčič on the deployment of EU Medical Teams to Italy

Europe led by Germany seems vulnerable to Trump’s threats

How Jack Ma sees a thriving future of entrepreneurship in Africa

Malaysia has achieved high levels of growth, but must do more to address governance and social challenges

Light at the end of the Eurozone tunnel

A Sting Exclusive: “Europe needs decisive progress for stronger cybersecurity”, EU Commissioner Gabriel highlights from Brussels

‘Address root causes’ of instability in Mali through ‘aid and support’ urges UN chief

Colombia is a Latin American success story, but must pursue new reforms to achieve stronger and more inclusive growth

A Sting Exclusive: “Climate change and youth inaction: oblivion or nonchalance?”, AIESEC wonders from Brussels

Employment MEPs want to ensure more flexibility and clarity for EU mobile workers

Chatterbox Rome Declaration cannot save the EU; Germany has to pay more to do that

How privacy tech is redefining the data economy

Why our future relies on more inclusive and transparent innovation

Africa cannot afford to lose doctors to COVID-19

Appreciation of euro to continue

Closing the trust gap: how responsible data use can accelerate a sustainable society

Coronavirus global response: EU Humanitarian Air Bridge to Afghanistan and further support

How innovation from within is transforming International Organizations as well as lives

State of the Union: Commission sets out new ambitious mission to lead on supercomputing

UN ‘stands in solidarity’ with cyclone-hit India – Secretary-General Guterres

Not faith, ‘but those who manipulate the faithful’ driving wedge between religions, UN-backed forum in Baku told

Tackling ‘deeply worrying’ global rise in anti-Semitism is a job for all societies everywhere, says UN chief

Accelerating SDG Progress in Asia – Pacific

YO!FEST ENGAGES 8,000 YOUNG EUROPEANS IN FUTURE OF EU

ECB: Reaching the limits of its mandate to revive the Eurozone economy

MEPs want the EU to play a stronger role in improving public health

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