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Google Said to Be Facing Record E.U. Fine by End of August Google Said to Be Facing Record E.U. Fine by End of August
(about 1 hour later)
European antitrust officials are preparing to hit Google with a potentially record fine by the end of August over some of the Silicon Valley giant’s search services, according to two people with direct knowledge of the case.European antitrust officials are preparing to hit Google with a potentially record fine by the end of August over some of the Silicon Valley giant’s search services, according to two people with direct knowledge of the case.
Margrethe Vestager, the European Union’s competition chief, is in the final stages of ruling on the case, said the people, who spoke on the condition of anonymity because they were not authorized to speak publicly. Any financial penalty is expected to be larger than the fine of 1.06 billion euros, now about $1.2 billion, then about $1.4 billion — at the time the highest ever — that Intel was forced to fork out for antitrust abuses in Europe in 2009. Margrethe Vestager, the European Union’s competition chief, is in the final stages of ruling on the case, said the people, who spoke on the condition of anonymity because they were not authorized to talk publicly. Any financial penalty is expected to be larger than the fine of 1.06 billion euros, now about $1.2 billion, then about $1.4 billion — at the time the highest ever — that Intel was forced to fork out for antitrust abuses in Europe in 2009.
As well as the fine, European officials could also force Google to alter how it operates in the region, and potentially elsewhere, to give rivals a greater ability to compete.As well as the fine, European officials could also force Google to alter how it operates in the region, and potentially elsewhere, to give rivals a greater ability to compete.
The case, linked to claims that Google diverted traffic from competitors’ rival services to favor its own comparison shopping site, is one of three investigations that the European Union’s executive arm has opened against the search giant. The other two involve Android, the company’s mobile software, and some of Google’s advertising products. The case, linked to claims that Google diverted traffic from competitors’ services to favor its own comparison shopping site, is one of three investigations that the European Union’s executive arm has opened against the search giant. The other two involve Android, the company’s mobile software, and some of Google’s advertising products.
European officials claim that the company favored many of its own digital services, including search and online maps, over those of rivals. Google has denied any wrongdoing.European officials claim that the company favored many of its own digital services, including search and online maps, over those of rivals. Google has denied any wrongdoing.
A spokeswoman for the European Union’s executive arm, the European Commission, declined to comment. Representatives for Google were not immediately available for comment.A spokeswoman for the European Union’s executive arm, the European Commission, declined to comment. Representatives for Google were not immediately available for comment.
Here’s what you need to know about Google’s lengthy standoff with European competition authorities:Here’s what you need to know about Google’s lengthy standoff with European competition authorities:
Google’s rivals have long complained that it has used its dominant position in online search to favor its other services, including restaurant recommendations and online maps.Google’s rivals have long complained that it has used its dominant position in online search to favor its other services, including restaurant recommendations and online maps.
The European Commission first opened an investigation into Google’s operations in late 2010. The inquiry focused on so-called vertical searches, or web queries around specific topics like online shopping. Official charges were filed against the search giant in 2015.The European Commission first opened an investigation into Google’s operations in late 2010. The inquiry focused on so-called vertical searches, or web queries around specific topics like online shopping. Official charges were filed against the search giant in 2015.
The same year, European officials opened a separate investigation into whether Google’s Android software for mobile devices hampered digital competition. That led to official charges against the company last year. The same year, European officials opened a separate investigation into whether Google’s Android software hampered digital competition. That led to official charges against the company last year.
The European Union’s third investigation of Google — into whether some of the company’s advertising products had restricted consumer choice — resulted in another charge sheet in July 2016.The European Union’s third investigation of Google — into whether some of the company’s advertising products had restricted consumer choice — resulted in another charge sheet in July 2016.
While the investigations are limited to Google’s activities in Europe, the consequences for the company — whose digital search and advertising businesses dominate in much of the world — could be far-reaching.While the investigations are limited to Google’s activities in Europe, the consequences for the company — whose digital search and advertising businesses dominate in much of the world — could be far-reaching.
Along with a hefty fine, the company, whose online search services have a roughly 90 percent market share in Europe, may also face “remedies,” or changes dictated by the European Union’s competition authority on how it operates across the bloc.Along with a hefty fine, the company, whose online search services have a roughly 90 percent market share in Europe, may also face “remedies,” or changes dictated by the European Union’s competition authority on how it operates across the bloc.
That could include tweaking its search algorithms and other technology to give rivals greater prominence in search queries, as well as greater regulatory oversight of its vast online businesses.That could include tweaking its search algorithms and other technology to give rivals greater prominence in search queries, as well as greater regulatory oversight of its vast online businesses.
European competition authorities are expected to hit Google with a combination of large fines and demands that the company changes how it operates across the 28-member bloc.European competition authorities are expected to hit Google with a combination of large fines and demands that the company changes how it operates across the 28-member bloc.
They can fine Google about 10 percent of its annual revenue, currently about $7.6 billion, but the financial penalty is likely to be significantly less than that. While the company can handle the fine, it is likely to appeal to the bloc’s highest court, the European Court of Justice, to contest any efforts to change how it operates.They can fine Google about 10 percent of its annual revenue, currently about $7.6 billion, but the financial penalty is likely to be significantly less than that. While the company can handle the fine, it is likely to appeal to the bloc’s highest court, the European Court of Justice, to contest any efforts to change how it operates.
The judges of the European Court of Justice have never overruled the region’s competition authority, though that is still a possibility. Litigation could drag on for years.The judges of the European Court of Justice have never overruled the region’s competition authority, though that is still a possibility. Litigation could drag on for years.
Google has vocally rebutted Europe’s charges, saying that competition for its search, advertising and other products is only a click away on the internet.Google has vocally rebutted Europe’s charges, saying that competition for its search, advertising and other products is only a click away on the internet.
The search giant also says that its services have helped consumers, advertisers and even some competitors find digital information.The search giant also says that its services have helped consumers, advertisers and even some competitors find digital information.
The company adds that the strength of other American technology companies in Europe, including Amazon and Facebook, shows that Google has not restricted Europe’s digital market.The company adds that the strength of other American technology companies in Europe, including Amazon and Facebook, shows that Google has not restricted Europe’s digital market.
“We can’t agree with a case that lacks evidence and would limit our ability to serve our users,” Kent Walker, Google’s general counsel, wrote in a blog post last year.“We can’t agree with a case that lacks evidence and would limit our ability to serve our users,” Kent Walker, Google’s general counsel, wrote in a blog post last year.
In the short term, it won’t affect them very much. In the short term, it will not affect them very much.
Legal action is likely to continue for several years.Legal action is likely to continue for several years.
But if European competition officials get their way, experts say that Google may have to tweak its digital services to comply with regulators’ demands.But if European competition officials get their way, experts say that Google may have to tweak its digital services to comply with regulators’ demands.
That could either be limited to changes for European users, or it could extend beyond the region, depending on Google’s ability to limit the region’s antitrust actions to the bloc’s borders.That could either be limited to changes for European users, or it could extend beyond the region, depending on Google’s ability to limit the region’s antitrust actions to the bloc’s borders.