The EU is preparing to file formal antitrust charges against Google, which could pave the way for a fine of up to $US6 billion. But Google is going to do everything it can to fight that fine, and it actually has a strong case.
The European Commission argues that Google is abusing its dominance of Europe’s search market and promoting its own products ahead of its competitors in Google Shopping.
The fine (probably) won’t be $US6 billion
The $US6 billion figure that Google may have to pay is the maximum possible amount that the EU could fine Google. It comes from looking at Google’s most recent yearly revenue, and then taking 10%. It’s a simple sum, but $US6 billion is the theoretical maximum amount that the EU could fine Google. In reality, a fine could be much, much smaller. The highest antitrust fine that Europe has issued to date was a $US1.44 billion fine issued to Intel, which was 4.5 of the company’s revenue.
The EU probably wants Google to make a simple change
Margrethe Vestager, the member of the European Commission who issued its statement of objection, said that the Commission doesn’t want to interfere with Google’s design or search algorithm. Instead, it just wants the company to put the relevant shopping results at the top of its search pages — whether they’re from Google or not. When pressed on whether the EU will take Google to court, Vestager explained that “every road is open.” However, she did go on to say that she was hopeful there would be a “parallel between a fast-moving market and a fast-moving solution.”
Google says it has a “very strong case”
The EU’s statement of objections is only the first step in a process that could lead to a court battle in the future. Now, Google has 10 weeks to respond before requesting an oral hearing. This is Google’s chance to tell its side of the story, and the company is clearly confident. In a memo to Google employees, Google emphasised that it had a “very strong case” with “especially good arguments.”
Google already fought off an antitrust investigation
The European Commission already carried out a three-year probe into Google, and the investigation ended with a settlement between Google and the EU. Google agreed to include three links to rival services alongside its own search results, which the EU was happy with. The EU said that the agreement was “far-reaching” and had a “clear potential to restore a level playing-field.”
The FTC ran a similar investigation — and decided not to fine Google
Google avoided paying fines to the FTC over its dominance, and the U.S. investigation focused on the same information that the EU has been considering. The FTC said that it had “closely co-ordinated” with the “parallel” Europen investigation with regular telephone calls, but it didn’t actually end up fining Google.
Google can just pull its services out of countries
Spain passed a law that allowed publishers to charge Google every time it used a snippet of their stories for services like Google News. Obviously, that wasn’t going to happen, so Google simply pulled Google News from its Spanish version of the site. Google has pulled out of China, too.
Google has won in Europe before
In October, Google was forced to remove thumbnail images and snippets of texts from news links to a collection of German publishers who were in a legal fight with Google. Instead of seeing normal Google News results, users searching for news links from the collection of publishers just saw headlines. That was a big victory for the German publishers at the time, as it had been accusing Google of “piracy.” However, just two weeks after the move, publisher Axel Springer relented and allowed Google to use its thumbnail images and snippets of articles after traffic to its articles plummeted.