Still pocket change for a multibillion company like Google.
I hope EU will keep hammering them with fines until they change, or until they start noticing the loss.
I hope EU will keep hammering them with fines until they change, or until they start noticing the loss.
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.
And there's other places on Earth that may impose their own fines.
What you're suggesting is economic war.
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.
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.
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.
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.
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.
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.