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Google faces more than €1 billion fine

by on16 June 2017

EU expected to announce record antitrust fine

Search outfit Google is facing a record-breaking fine from the EU over its alleged abuse of its market dominance.

Word on the street is that EU officials are expected to announce that the tech giant has been guilty of manipulating its search engine results to favour its new Google Shopping service.

The move follows a seven-year investigation by Brussels. In July last year, the commission had reiterated its belief that the search giant had “abused its dominant position by systematically favouring its comparison shopping service in its search result pages”.

If the fine goes ahead, this will be close to the €1 billion handed out to chipmaker Intel in 2009, over its anticompetitive behaviour. The rumours suggest it will be a higher fine.

It follows the commission’s decision to force Apple to pay Ireland €13 billion in unpaid taxes as a consequence of the regulator finding that the tech giant’s tax regime in Ireland had been a form of  “illegal state aid”.

A financial sanction for abuse of a monopoly position is capped at a maximum of 10 percent of the total revenues of the company involved, which in the case of Google’s parent company, Alpahbet, was $90 billion last year. It is calculated as up to 30 percent of Google’s shopping revenues multiplied by the number of years of the anti-competitive behaviour.

European regulators have investigated Microsoft, Intel, Apple, Google, Facebook and Amazon. The US press claims that is because Brussels is waging war against Silicon Valley. While they do tend to attract the attention of the watchdogs, this is mostly because they play fast and footloose with European law, which is tougher than the US. 

Google’s general counsel, Kent Walker, claimed in a blogpost last year that the EU’s case “lacks evidence”. The company is likely to appeal against a negative decision in the European courts, delaying a resolution to the case for years.

The decision from the regulator would, however, open the way for shopping comparison competitors or customers to file damages claims against Google.


Last modified on 16 June 2017
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