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

Advertising

Advertising

Featured Stings

ECB’s billions fortify south Eurozone except Greece; everybody rushes to invest in euro area bonds zeroing their yields

Why do medical students seek for work abroad?

Quality Internships: Towards a Toolkit for Employers

COP21 Breaking News_12 December: 195 countries adopt the First Universal Climate Agreement

Let your fingers do the walking

“Only through energy policy we can trigger competitiveness”. The Sting live from #EBS2015: Energy Union – When will it happen?

The European Youth Forum needs better signal for its “call” for Quality Internships

The consequences of Brexit seen by a European young entrepreneur

EU should promote immigration as a humanitarian issue in order to provide a more permanent solution

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

Youth Internationalization: part of everyday life in JADE

We’ll succeed together

Silk Road Unlimited

EU-India summit: Will the EU manage to sign a free trade agreement with India before Britain?

Is Eurozone heading towards a long stagnation?

EU members commit to build an integrated gas market and finally cut dependency on Russia

It’s Brexit again: Nigel Farage launches a personal campaign to lead the ‘No’ front

A Sting Exclusive: “One year on from the VW scandal and EU consumers are still in the dark”, BEUC’s Head highlights from Brussels

IMF: Sorry Greece it was a mistake of 11% of your GDP

EU: 13 major banks may pay fines 10% of worldwide turnover

EU deserves the title of the Syrian affair merchandiser

The European Youth raises their voices this week in Brussels at Yo!Fest 2015

EU, Brazil to hold high level Summit in Brasilia

Climate change and its adverse impacts on health

MEP Cristiana Muscardini @ European Business Summit 2014: International Trade in Europe

Alexandre in Czech Republic

Eurozone: GDP development heads to naught; the expensive euro serves only Germany

Who will secure Lithuania?

Deep chasm still divides Athens and Brussels; can Eurozone use the nuclear arm of liquidity against Greece?

The financial crisis always prefers the south of Eurozone

Eurozone: The cycle of deficits, debts and austerity revisited

COP21 Breaking News_03 December: Europe’s children urge leaders to commit to climate action at UN Climate Summit in Paris

The Eurogroup offered a cold reception to IMF’s director for Europe

European Youth Forum and youngest MEPs call on President Juncker to keep his promise to Europe’s youth

EU leads the torn away South Sudan to a new bloody civil war

My twin from Guangzhou

“One Belt One Road”: Its relevance to the European Companies

Global health challenges require global medical students

ITU Telecom World 2017: exploring smart digital transformation

It’s a week dedicated to all EU budgets; seven days that can make or break the Union

The three sins the EU committed in 2015

EU Youth Conference in Riga concludes with recommendations for ministers

On Brexit: the outcome of UK elections next May to be based on false promises?

UK keeps its Brexit plan secret or there is no strategy at all whatsoever?

Spirit unlimited

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

The European Commission cuts roaming charges. But “it’s not enough”…

Dealing with stress among healthcare professionals: are we missing the elephant in the room?

Tackling Youth Unemployment

Germany tries to save Europe from war between Ukraine and Russia

What are the real targets of EU’s efforts to fight tax evasion?

NEC @ MWC14: “Smart cities” hold the key to enhancing citizens’ lives and cutting costs

Education and Training: where do we stand in 2014?

Sochi not far away from Ukraine

A Young entrepreneur cries out: “start in Europe, stay in Europe”

A Sting Exclusive: “Youth voice must be heard in climate change negotiations!”, Bérénice Jond Board Member of European Youth Forum demands from Brussels

Half of Eurozone in deflation expecting salvation from monetary measures

Alice in Colombia

Presentation of Juncker’s Investment Plan: Can 315 billion euros save the EU?

The EU slams Theresa May’s Brexit option; sets base for own European defense, security platform

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s