Google Fined Nearly $3 Billion By Europe

20:13' 04-07-2017
Leading search engine company Google, which earns $90 billion in annual revenue, has been fined 2.4 billion Euros (US$2.7 billion) by European antitrust officials for unfairly favouring some of its own services over those of rivals.


    The penalty, according to a New York Times report, is a record, more than double the previous largest penalty in this type of case. Previously, the highest fine was 1.06 billion Euros (US$1.21 billion), levelled against Intel in 2009. It reflects Europe’s concern that American information technology companies have come to dominate how Europe’s 500 million citizens interact online.

    Antitrust law (called competition law in English-speaking countries other than the US) regulates the conduct and organisation of business corporations to promote fair competition for the benefit of consumers.

    The European Commission, which imposed the fine, allege that Google systematically elevates its shopping service, giving an illegal advantage to another Google product over other options. It gave the company 90 days to stop, or face fines of up to 5% of the average daily worldwide turnover of its parent company, Alphabet.

    Some people in the US believe the European Union is unfairly picking on American companies. Apart from the fine imposed on Intel, in recent years the European Union’s antitrust chief Margrethe Vestager has demanded that Apple repay US$14.5 billion in back taxes in Ireland, opened an investigation into Amazon’s tax practices, and raised concerns about Facebook’s data gathering.

    The companies involved have denied the charges, and Google intends to appeal against the decision. Google claims its services have helped Europe’s digital economy grow, and there is other significant online competition, including companies like Amazon and eBay.

    Under European rules, the company must come up with proposals to guarantee that it treats competitors fairly. The authorities can demand that Google make further changes if they are not satisfied with the proposals. They may also choose to set up an independent monitor to watch over Google's activities. Google will almost certainly oppose this, as its search algorithms are its most important intellectual property.

    Google also faces two other antitrust charges in Europe related to its popular mobile software Android, and to some of its advertising products.

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Keywords: european antitrust officialseuropean commissiongoogle

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