Google Likely to Appeal $2.7 Billion Fine For 'Abusing its Dominance'

  • Google Likely to Appeal $2.7 Billion Fine For 'Abusing its Dominance'

Google Likely to Appeal $2.7 Billion Fine For 'Abusing its Dominance'

Google doesn't break out revenue from Android, but it is a critical part of Google's attempt to expand its ad revenue in the mobile space, and also fuels purchases through the Google Play store. Google controls a market share in searches of over 90 percent in Europe.

"There is this principle that Google has to adhere to being a dominant company, and that is equal treatment in the neighboring markets of shopping comparison services to treat the other companies as they treat themselves", Margrethe Vestager, the European commissioner for competition, said in a video interview with Bloomberg.

So far, investors have shrugged off the EU's threatened crackdown, with Google's holding company Alphabet's shares down 1.8 percent in early USA trade amid a continued selloff in technology stocks. It also leaves other tech companies wondering how far Vestager may go to force USA tech giants to concede more ground to smaller competitors. "And... it denied European consumers a genuine choice of services". By this measure, Google's fine could have been as much as $9 billion based on parent company Alphabet's 2016 turnover.

The announcement caps a seven-year investigation into Google's trade practices.

Indeed, some of Google's American rivals praised the Commission's decision. The company's stand is that it tries to serve both users and advertisers "in ways that are useful for both", and that's a challenge on its own. And advertisers want to promote those same products. "We will review the Commission's decision in detail as we consider an appeal, and we look forward to continuing to make our case", Google's general counsel, Kent Walker, said in a statement.

Under European rules, it is up to Google to find a way to comply with the judgment, and Vestager offered no specific guidance about how it must modify its services.

Google now has 90 days to "end this conduct" or face further penalty payments, Vestager said.

"This is really sending a message to Google: change or we'll come after you", said Thomas Tindemans, the chairman of the Brussels office of Hill+Knowlton Strategies, a consultancy, who has worked on previous technology antitrust cases. With more than 500 million residents, the 28-nation bloc has more consumers than the United States. "U.S. lawmakers and regulatory authorities, by contrast, have been "asleep at the switch" for far too long". It also dwarfs the largest monopoly fine to date, a €1.06 billion ($1.9 billion) fine against Intel in 2008.

Reports say Google is now mulling whether or not to appeal the decision (fine) by the European Union which may get significantly larger if it does not amend the way shopping results factor into its search engine in the next 90 days.

But worse for Google, European Commission competition watchdog Margrethe Vestager may just be getting started on the US internet giant.