Google could be hit with record EU fine - Mobile World Live

Google could be hit with record EU fine

12 JUN 2017

The European Union (EU) could levy a record fine against Google if the European Commission (EC) concludes the company manipulates search results to promote its own shopping comparison service.

An EC ruling is expected in a matter of weeks as Competition Commissioner Margrethe Vestager aims to draw a line under an investigation before the EU breaks up for the summer, Bloomberg reported. Due to a desire to make a point, the fine against Google could exceed a $1.2 billion penalty placed on Intel in 2009, which remains the bloc’s biggest fine for monopoly abuse to date.

Google parent Alphabet posted revenue of $90 billion in 2016, which means a fine would be capped at $9 billion and will be calculated from sales in the market under investigation. Google itself generated $79 billion in ad revenue in 2016, and while the amount generated from shopping search advertising is unknown, it is likely to be a big chunk of the figure.

In addition to revenue, the EU will also take into account the number of years Google manipulated its search, which regulators estimate began in 2008, when calculating any fine.

Stephen Kinsella, a lawyer at Sidley Austin representing companies which complained to the EU about Google, told Bloomberg: “The European Commission has strongly signalled that if there is going to be a fine it would need to be at a level that would have deterrent effect.”

Google hasn’t met with regulators to discuss a potential EU order or how it might implement any changes, Bloomberg said.

The tech giant’s AdSense advertising service and Android mobile phone software are also being investigated.

Previous form
In 2016, Vestager accused Google of “stifling competition and innovation” by using Android to impose unfair restrictions on device manufacturers and operators.

Vestager is known for taking a hard stance, imposing a €110 million fine on Facebook in May for providing “incorrect or misleading” information in 2014 regarding its $20 billion acquisition of WhatsApp.

Previous reports pegged the fine Google may face at between €3 billion and €6.6 billion.

The company would have the right to appeal any fine, though the process could take years. Microsoft only won a 4 per cent cut to an EC fine using the appeal process, while Intel is still waiting on a decision.

In December 2016 Apple and the Irish government outlined their grounds to challenge an EC decision to make the company pay €13 billion plus interest in back taxes to the country.


Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

Read more