Google loses challenge against EU antitrust ruling, $2.8B fine
reuters.com
reuters.com
[0] https://ec.europa.eu/commission/presscorner/detail/en/IP_17_...
Heck name a single product comparison shopping search engine.
There were / are plenty. Google's idea of being the only game in town is mostly marketing for almost all of their products.
It doesn't really matter because google shopping is (or was?) just search ads with pictures. Every item shown was set up and paid for in Ads IIRC.
"But the company being accused of having a monopoly has the best product and I like it" was said about Windows too when they were locking out competition. It's short-sighted.
It's really nice to have thriving local internet.
If not, this was a negative sum game for google.
Would be very curious to know.
Then they seemed to turn into ads? Now I ignore it along with most of the others as I'm sure many folks do and just shop through a few places (which is only marginally better).
Seducing you into consumption is how Google makes money, isn't it?
I think if Google cares about product search quality then it would be good. Now it’s just a paid product rather than trying to organize and present info.
There has to be some mechanism for some additional cost for the defendants to prevent appealing all court decisions...
An where have thesse 'fines' resulted in anything beneficial to human society.
THe title *SHOULD* read:
Google forced to fund N schools in Germany for fucking up.
But no,
In ALL of any of these 'fine-ings' can we have a document of where the fines were applied and what they accomplished?
That would only give them another way to put a positive spin on their anti competitive behavior.
It's particularly noticeable because the regulations selectively enforced are usually a huge hindrance to market entrants.
<Insert golden goose analogy here>
How did you draw a line from the former to the latter?
Europeans don't want you to keep that much data on them. If your business model requires that, it is not one we want to encourage.
It's also why tech companies keep complaining about EU regulators.
The company would still feel the same incentive. For the government on the other hand, it removes the incentive to fine for one's own gain. I like that it would remove this conflict of interest.
By removing the money, it's essentially very slightly reducing inflation.
>>While in theory this sounds nice, in practice it means everyone gets nothing.
im trying to find out where anyone got something?
Usually, this is impossible, because fines are tossed into a large pool of fungible money which is periodically allocated, but the allocation isn’t done per individual fine.
Of course, the budget which applies to the fund involved is usually public, so insofar as it is approximately and imprecisely (in relation to a specific fine) possible, it is already done routinely.
Actually that'd be great for serious transgressions. They're at the helm, they make decisions, they reap the rewards, why shouldn't they also be punished when the company fucks up seriously?
Then, practically speaking, the groups involved are simply too large to pin outcomes on individuals, and we don't do guilt-by-association. The timescales are also wrong, because the people responsible will often have moved on long ago. And the people usually do not participate in the spoils anywhere close to linearly with their involvement (which is a good thing because it prevents most corporate malfeasance: you aren't going expose yourself to moral and criminal guilt at a 9-5 job).
Also,, the standard-of-proof that is required is higher ("beyond reasonable doubt", i. e. 95%) than it is in civil cases ("preponderance of evidence", i. e. 50%). This is an outcrop of that moral-guilt vs responsibility thing from above, and also from the fact that in civil court it's often arbitrary what side of the courtroom you end up on.
I mean shitshows like Boeing, Equifax and similar. Where the company showed blatant disregard for safety and security, and it was really not a single person making a mistake, but big parts of the entity being rotten to the core. For such things, the executives should face consequences in the form of a combination of: go to prison for some time, face heavy fines against their personal wealth ( ideally proportional), and have bans on leading any commercial for some time afterwards.
The incentives are all wrong for everything below fraud ( Enron level). Boeing got away with literally manslaughter through criminal negligence, and what consequences where there? The CEO got a golden parachute, and a chief pilot got thrown under the bus. That will make them learn their lesson, right?
>"Today's judgment gives the European Commission the ammunition it needs to tighten the screws on Google in other areas where it is throwing its weight around, like in online advertising, app stores and video streaming," he said.
Great idea. Search isn't the only area Google has done bad things. And Google isn't the only big tech company which has done bad things.
Doing so much that they are impacted financially IS.
So in this case if you don't make it so that the bad behavior is "unprofitable", then there is really no incentive to change as profitable business practices will not be discontinued and fines just become part of the operating costs.
Basically in this case it was breakeven minus lawyer fees if they get caught which only happens X% of the time.
That is why there are usually punitive premiums so that the business calculus never makes sense as the cost of doing it x risk of being caught is always a negative compared to potential profit.
TLDR: Fine should be 2-10x times benefit gained or higher to prevent even thinking about trying to get away with it.
Again, the calculation is not public (or: I didn't find it), and I have no idea what the revenue from Google Shopping in the affected countries in the given years were, Google Shopping is not AdSense or AdWords so it's not going to be huge.
But the method is known: the starting point of the fine is sales (revenue, not profit), and is up to 30%. Since this went on for many years in multiple countries, we can imagine it will be on the higher side.
This is also increased by the duration of the infringement, with a multiplier calculated on the basis of the days of participation in the infringement.
If we expect Google Shopping to run with a 4% profit margin on sales, a fine >30% is well within 2x-10x of the benefits gained.
But: your worry is "they get caught only X% of the time". This is _also_ considered in the fine guidelines, because the fine will be increased with each subsequent violation by the same entity.
Every time you get caught, you will be punished worse for all subsequent violations, so each fine changes the loss/gains calculation for all your future anticompetitive behaviour.
While it’s not clear to me if the fine accounts for Google’s total revenue from Google Shopping while the infringement occurred it at least is based on a percentage of revenue which increases with each reoccurrence.
According to [1] “the starting point for setting the fine will take into account a percentage of the value of sales to which the infringement relates, multiplied by the number of years of participation in the infringement. Under the fines Guidelines in force since 1998, the starting point of the fine is based on a lump sum, depending on the degree of gravity of the infringement, to which a 10% increase is added per year of infringement.” and “The Commission's fine of €2 424 495 000 takes account of the duration and gravity of the infringement. In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from its comparison shopping service in the 13 EEA countries concerned.”[2]
1: http://europa.eu/rapid/press-release_MEMO-06-256_en.htm?loca...
2: https://ec.europa.eu/commission/presscorner/detail/en/IP_17_...
That's the difficulty with this sort of ruling. What, exactly, does the EU think Google did wrong here? Putting new stuff into search results? That should not be illegal and no such law exists. Reality is the EU will be perceived as both financially robbing America's tech industry and blaming it for its own failures to develop competitive services, regardless of what spin "EU citizens" try to put on this. The perception is inevitable when the supposed crime is so difficult to understand.
But this is really all part of a pattern. The EU's cases and laws against tech are always based on super weak rationales. I'm long since past the point of seeing this as a simple form of extraction-ism, and I'm European and live in Europe.
Also https://www.marketwatch.com/story/how-googles-27-billion-fin...
> The Commission's fine of €2 424 495 000 takes account of the duration and gravity of the infringement. In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from its comparison shopping service in the 13 EEA countries concerned.
But I didn't see a detailed calculation anywhere.
[0] https://ec.europa.eu/commission/presscorner/detail/en/MEMO_1...
Google, Amazon, Facebook, Microsoft, Apple
They all share a same trait, born from the same place, operates globally, there is a weird pattern over there
Then there's censorship and working with authoritarian regimes like China.
I hope EU will keep hammering them with fines until they change, or until they start noticing the loss.
As of 2018, they were pulling about 32.2 billion euros in revenue in the European market, so there's quite a ways to go.
Of course, if the laws are structured fairly, such steep fine levels would absolutely cripple domestic software companies that ran afoul of them...
Scaling to revenue isn't unfair. It's how you properly scare multinationals into compliance.
One can only dream. There is no efficent solution to rangebanning google ips on mobile devices that i'm aware of.
While the fine seems to be doing better than mere pocket change, the fine must be more costly than the benefit of the anti-competitive behavior in order to be effective.
"Only".
> The company is aggressively buying back stock, having repurchased a record $12.8 billion in the second quarter, bringing the total so far in 2021 to $24.2 billion.
> The company is on pace to buy back around $50 billion of stock this year. It’s a testament to Alphabet’s earnings power that its cash and equivalents were down less than $1 billion in the first half of the year to $135.9 billion despite the heavy repurchases.
So they "only" have $120 Billion on hand while already spending $25 billion of their cash buying back stock and planning on spending another $25 billion this year.
https://www.barrons.com/articles/alphabets-voting-shares-are...
That might be up for debate. According to Google Finance [1] Alphabet received income of $18.94B in September! So the fine is 15% of ONE quarter of their income.
I don't think that is sufficient and qualifies to more like a slap on the wrist.
[1] https://www.google.com/search?q=alphabet+revenue
edit: I should have said quarter, not month. Revised, sorry for the confusion.
Making unlawful business decisions shouldn't be a calculated power move for them. It should put them in a worse position than they started. Like a chess game that gets rewound all the way back to the last legal move, but it costs them a rook or queen as well for the trouble they caused.
Corporations don’t go to jail.
Assuming < 100% chance of getting caught for an unlawful behavior, you're incentivizing unlawful behavior if the downside is essentially capped at $0.
The alternative argument is that what you really want a fine to do is penalize law-infringing heavily enough that a companies' shareholders make not getting fined again high priority. In that light, you're primarily concerned about levying fines against a company's profit margin/funds they're using to invest in future growth. In which case, yeah, this fine is far too paltry to concern investors in a vacuum.
> Alphabet only ever has ~120 Billion USD on hand at any given point in time
To them, 2.8 billion USD is change. It's a tip for the government. Make it something like 70 billion and they might start caring. And if it looks like they aren't caring, fine them again until they do.
What you're suggesting is economic war.
A $70b fine would justify the excessive targeting of a major EU corporation in response.
If the EU were to pretend that Google deserved an arbitrary $70b fine, then they could just as easily pretend US big tech broadly deserves several hundred billion USD in fines.
It's pretty clear where that kind of insane behavior leads.
Proportionality doesn't work with companies that are disproportionally rich. The purpose of the fine is to get them to stop violating people's rights and it's clear that pitiful 2 billion dollar fines are not going to accomplish that objective.
> It's pretty clear where that kind of insane behavior leads.
It leads to Google no longer being a monopoly as well as being more respectful of people's privacy.
Ok, how much should the EU be allowed to fine Google?
How about $12b, that should be 10% of the money they have on hand as I understand it. I think getting fined 10% of your operating money might make you compliant to the law - or is the problem that Google should never be fined any amount that would cause them to become compliant to the law?
on edit: put dollar sign in
A happier, less evil world.
these large coorperations and the nations backing them is nothing new.
Also, it is a strategic intrest of europe to protect airbus, especially considering it is the model in terms of being a multinational, truely european company[1], compared to a national one.
Huge fines are the only thing that will work. Corporations these days are richer than nations and these little 2 billion dollar fines do nothing.
They can and usually do. I don't think you'll see any US government action over this $2.8b fine. If the EU decided to try to fine Google out of existence, the US government would be displeased, as that is a direct attack on US interests (it hurts US GDP, tax revenue, employment rate, and US tech dominance), and can and would take action, whether to prevent the fine from happening, to prevent Google from going out of business, or in retribution to prevent the EU from doing anything similar in the future.
> They're free to either pay or get out of the country that's imposing the fine.
Yes, and the EU isn't dumb enough to fine Google enough that would make them consider pulling out of the EU, as that would do pretty significant damage to the EU economy and the willingness of foreign companies to do business in the EU.
> Why does Google get to exploit foreign citizens and violate their rights while under the protection of the US government?
The US government doesn't really care whether Google exploits foreign citizens or violates their rights, as the US government has no obligations to protect foreign citizens and their rights, and does plenty of exploitation and violation of its own to foreign citizens. As long as Google is a net benefit for US citizens and the US government, the US government has incentives to protect Google from foreign governments. None of this is unique to the US or Google, you could replace any country and major corporation and this all still holds true.
> Huge fines are the only thing that will work.
Huge fines are politically impossible, they can't work at all.
> Corporations these days are richer than nations and these little 2 billion dollar fines do nothing.
I don't think so, on either count. The richest corporations are richer than the poorest nations, but that's been true for a long time. The richest corporations are still an order of magnitude smaller than the richest countries, though. And a $2b fine doesn't do nothing, it may do less than you want, but it's still a lot of money that the corporation no longer has and would rather have not paid.
You come to our market, you play by our rules. We don't bend the law for capital interests quite as much as you do, either get used to it or get out.
And there's other places on Earth that may impose their own fines.
I think the top search results which convert to direct sales over the course of 8 years is worth more. Sorry... We can debate, but the reality is many companies ad spend per year is double this number and Google has quadrupled in value since this started which is in fact relevant.
I doubt it.
The fining rules EC follows are intended to ensure the fines exceed the benefit received.
There are more details about the calculation of the fines in the original EC decision of the (AT.39740), section 14 Fines starting from page 207: https://ec.europa.eu/competition/antitrust/cases/dec_docs/39...
"The Commission concludes that the proportion of the value of sales to be used to establish the basic amount of the fine should be […]%."
If it's not 100%+ percent, Google profited, even if it's a penny. This doc is missing way too much data (table 29) for it to make any real sense.
To follow your analogy, they robbed a bank for a million dollars and got fined 2 million. Then keyboard warriors shouted that they should have been fined 10 million because of unrelated crimes which are still being litigated.
Well, more accurately they robbed a bank for a million dollars and got fined a million dollars.