Google To Remain Under EU’s Spotlight After Hefty Fine Levied
Google could face bigger issues after the recent EU findings were revealed.
Beyond a headline-grabbing 2.4 billion euro ($2.7 billion) fine that EU antitrust regulators have levelled against Google, the internet giant is likely to be shackled for years by Tuesday's precedent-setting decision defining the company as a monopoly.
The ruling opens the door for further regulatory actions against more crucial parts of Google's business – mobile phones, online ad buying, and specialised search categories like travel – while easing the standard of proof for rivals to mount civil lawsuits showing Google has harmed them.
The real sting is not from the fine for anti-competitive practices in shopping search, but the way the EU has thrown the issue back on Google to be solved, meaning the company won't be able to comply through an easy set of technical steps.
In effect, the Commission is forcing Google to demonstrate that rivals have made substantial inroads into its businesses before there is much chance of it being let off the regulatory hook. EU competition chief Margrethe Vestager promised Google was in for years of monitoring to guard against further abuses.
The EU's 2004 ruling that Microsoft Corp had abused its dominant market position in Windows and other markets is now seen as having curtailed the software giant's moves over the subsequent decade to expand more quickly into emerging markets such as online advertising, opening the way for Google's rise.
Warning Shot
The EU ruling is a warning shot for two on-going EU probes into Google's Android mobile operating system and AdSense ad system, said Richard Windsor, an independent financial analyst who tracks competition among the biggest U.S. and Asian internet and mobile players, including Google.
More importantly, Google must find ways change its business practices without harming its very lucrative advertising business model, which accounted for around 85 percent of the $90.3 billion in revenue of parent company Alphabet in 2016.
This could result in a profound change to the company's business models, he predicted.
Yet another worry for the company could be a wave of lawsuits in the future.
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