Google just got hit with a record $2.7 billion fine in Europe
The European Union's head of antitrust enforcement announced a record $2.7 billion fine against Google on Tuesday, accusing the search engine for illegally favoring its own comparison shopping service as customers used Google to search for products online. That's the biggest fine Europe has imposed on any company ever.
“What Google has done is illegal under E.U. antitrust rules. It has denied other companies the chance to compete on the merits and to innovate. And, most importantly, it has denied European consumers the benefits of competition,” E.U. competition chief Margrethe Vestager said in Brussels on Tuesday.
European officials claim that Google broke the law by unfairly steering customers to its shopping service while demoting the search results of its competitors. Google, however, swiftly issued a response. The company disputed the E.U.'s findings and said it is considering an appeal. The search giant maintains that its shopping service helps consumers and advertisers.
“When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products,” Google senior vice president and general counsel Kent Walker said in a statement. “We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”
Why it matters
The massive fine marks the latest clash between European regulators and American tech companies. It also reinforces Vestager's reputation as an aggressive antitrust regulator. Last year, she announced that Apple owed $14.5 billion in back taxes after striking a sweetheart deal with the Irish government that allowed the company to underpay its tax burden for more than a decade. Last month the advocate general of Europe's highest court found that Uber, the popular ride-hailing company, should be classified as a taxi company rather than a tech firm, which may expose Uber to tighter regulations.
As for Google, if Tuesday's ruling stands, it could compel the company to redesign how it presents search results, shrinking its ability to attract advertising revenue. More broadly, the record fine may wind up steering the evolving boundaries of tech-industry regulation, defining the government's power to shape a company's behavior on the Web — even one as powerful as Google.
The announcement comes as Google faces two other ongoing antitrust cases in Europe, one over its Android operating system and another concerning its advertising platform, AdSense.
Could it happen here?
It could, but antitrust experts say it’s a long shot. Although President Trump has often vowed to go after large companies as part of his populist platform — promising, for example, to block AT&T’s acquisition of Time Warner — in reality, Trump’s ability to start or influence antitrust investigations is somewhat limited. He could indirectly shape the process by appointing senior officials at the Federal Trade Commission or the Justice Department who may be more inclined to pursue an aggressive antitrust agenda. But Trump has been slow to fill those seats.
Key federal officials, such as Acting FTC Chairwoman Maureen Ohlhausen, were part of a group that chose to end an agency investigation into Google five years ago. And Makan Delrahim, Trump’s Justice Department nominee for antitrust issues, is viewed by analysts as an independent professional who is unlikely to bow to outside pressure.
Still, some of the same companies that pushed for European antitrust action could launch a similar campaign in the United States. “We are going to leave all options on the table,” said Luther Lowe, vice president of public policy at Yelp, which played a major role in lobbying against Google at the European Commission.
Should Yelp push for U.S. regulators to act, there is no guarantee that they will. Even if they do, the resulting investigation may not necessarily lead to an enforcement action, and any enforcement action would need to pass muster with a judge, said Geoffrey Manne, executive director of the International Center for Law and Economics, which is partly funded by Google. “Unless you can convince a court, you're stuck,” said Manne.