Maybe if there is any sign that your company has reached a pinnacle in the tech industry it is having an anti-trust case brought against you. After gaining a dominant position throughout the 1990’s and early 2000’s, anti-trust cases were brought against Microsoft for unfair monopolistic practices according to the US Department of Justice and the European Commission. In addition to financial penalties, Microsoft had to change certain business practices and unbundle some of its software applications from its operating system Windows. For example in the European Union, Windows had to be offered for sale without Windows Media Player included.
Over the past year, we’ve reported on a somewhat similar drama unfolding between Google and the European Commission. And now it looks like that case is about to be formally put forward.
The Telegraph is reporting that within weeks Google could face a record-breaking fine from the European Commission (the European Union’s executive branch of government located in Brussels). The European Commission will be asserting that Google has abused “its monopoly on general web search over many years.” Legal sources for the Telegraph say specifically the fines will be over manipulating search results for shopping comparisons.
But the European Commission might also cite Google for changes in its algorithms “during the investigation that made it even harder for competitors to thrive, as well as what some officials now see as its delaying tactics during the investigation.” Additionally, there have also been indications of a new investigation into Google’s Android operating system for smartphones and over specialized web search markets such “such as travel information and maps.”
Google likely faces a fine of €3 billion (roughly $3.4 billion) according to the Telegraph. But if the European Commission is feeling particularly zealous, they could seek a maximum of a tenth of Google’s total annual sales; or about €6.6 (roughly $7.5 billion). The fine would also come with a future ban on Google manipulating search results in favor of its own services or to the detriment of rivals.
The European Commission’s investigation has been going on for the past seven years. According to the Telegraph, the previous Competition Commissioner in charge of the investigation was seeking a deal with Google to avoid formal charges. But the current Competition Commissioner who took over in 2014, Margarete Vestager, has “brought a new, more aggressive style to the role, according to lawyers in Brussels.”
Under EU law, they can choose to fight the fine in the European Court of Justice. Google has dismissed anti-trust claims by referencing how competitors such as Amazon and eBay are prosperous. It is certainly a tough time for Google’s legal team as it faces two high-profile cases with far-reaching implications for the rest of the tech industry. In addition the European Commission’s potential fines, Google is also in court fighting a copyright lawsuit by Oracle over the use of APIs in the Android operating system.Further reading: Alphabet, Anti-trust, European Commission, Google, Microsoft