No one on Google parent company Alphabet’s 2016 Q1 earnings call even acknowledged the biggest European story of the quarter for the company: Its epic antitrust battle with the European Commission.
On Wednesday, the Commission formally filed antitrust charges against Google over its Android mobile operating system. It alleges that the company is abusing its dominant position to promote its own products at the expense of it competitors.
If found guilty, Google could be fined up to $7.4 billion (£5.2 billion, or €6.5 billion) or 10% of 2015 revenue, and forced to change how it distributes its apps and products in Europe — something that would have a direct impact on its bottom line.
So far, the company is carefully controlling what it says about the case. In an emailed statement soon after the complaint was announced, Google SVP and general counsel largely reiterated what he wrote in a prepared blog post: “Android has helped foster a remarkable — and, importantly, sustainable — ecosystem, based on open-source software and open innovation. We look forward to working with the European Commission to demonstrate that Android is good for competition and good for consumers.” (Google’s European boss Matt Brittin also declined to comment any further on the matter when Business Insider saw him at AdWeek Europe.)
Google has 12 weeks — three months — to respond formally to the Commission’s charges.
On Thursday, Alphabet reported its Q1 earnings. On the subsequent investor call Google CEO Sundar Pichai and Alphabet CFO Ruth Porat didn’t bring up the company’s regulatory woes on the Continent, and analysts didn’t talk about it in the subsequent Q&A. (There’s a full transcript of the call here.)
The company’s stock sunk around 6% in after-hours trading — but that was because it failed to meet analyst expectations for the quarter.
Interestingly, Alphabet’s stock wasn’t really affected by the European Commission’s announcement on Wednesday. In fact, it actually opened higher.
If Google loses the antitrust battle, it could have a major impact on its ability to monetise Android in one of the largest markets in the world. But right now, it looks like investors are willing to wait and see.
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