The European Union is preparing to fine Google for anti-competitive practices, according to a report from UK’s The Telegraph.
The newspaper cites sources claiming that Google is facing a fine of around €3 billion ($3.4 billion), with the final decision expected to be taken before the summer recess. An announcement could happen as soon as next month.
The European Commission, the EU’s executive arm, thinks Google is stifling competition and ultimately hurting consumers by manipulating search results for its own gain.
In this particular investigation, which started in 2010, Google is accused of unfairly promoting its shopping services at the expense of competitors. But, as we explained here, it’s very difficult to draw the line between what’s fair and what’s not. On the one hand, Google should be able to reap the benefits of its own labor. On the other, when a company is as dominant as Google is in the search market, normal rules no longer apply and regulators have to step in to ensure that smaller competitors get a fighting chance.
Google has vigorously opposed any wrongdoing accusations. The company has tried to settle the charges at least three times, according to Reuters, and offered to make changes to the way results are displayed in its search engine. But, under Competition Commissioner Margrethe Vestager, the EC has adopted a harsh stance and Google’s chances to avoid a fine are very small.
The maximum penalty that Google faces is 10% of its annual revenue, which is around $7.5 billion. The largest competition fine the EU ever applied was $1.4 billion, to Intel, in 2009.
In addition to the blistering fine, Google will reportedly be forced to change its search algorithms, something that the company has strongly refused so far.
This is just one of the Google inquiries that the European Commission is conducting. Last month, the Commission officially charged Google with alleged anti-competitive practices in its Android business. According to the charge, Google unfairly restricts companies from developing Android forks. European regulators also took issue with the way Google requires phone makers to preload Android devices with specific apps, like Gmail or YouTube.
Do you think Google plays fair in its search and Android businesses? If no, why not?