EU Hits Google With Record $2.7 Billion Antitrust Ruling

Margrethe Vestager, the European Union antitrust chief, in Brussels on Tuesday. In addition to the Google case, she has previously demanded that Apple pay $14.5 billion in back taxes in Ireland, opened an investigation into Amazon’s tax practices in Europe and raised concerns about Facebook’s dominance over people’s digital data. (Credit: Emmanuel Dunand/Agence France-Presse — Getty Images)
Margrethe Vestager, the European Union antitrust chief, in Brussels on Tuesday. In addition to the Google case, she has previously demanded that Apple pay $14.5 billion in back taxes in Ireland, opened an investigation into Amazon’s tax practices in Europe and raised concerns about Facebook’s dominance over people’s digital data. (Credit: Emmanuel Dunand/Agence France-Presse — Getty Images)

Google suffered a major blow on Tuesday after European antitrust officials fined the search giant a record $2.7 billion for unfairly favoring some of its own services over those of rivals.

The penalty, of 2.4 billion euros, highlights the aggressive stance that European officials have taken in regulating many of the world’s largest technology companies, going significantly further than their American counterparts.

By levying the fine against Google — more than double the previous largest penalty in this type of antitrust case — Margrethe Vestager, the European Union’s antitrust chief, also laid claim to being the Western world’s most active regulator of digital services, an industry still dominated by Silicon Valley.

“In Europe, companies must compete on the merits regardless if they are European or not,” she said on Tuesday. “What Google has done is illegal under E.U. antitrust rules.”

The apparent focus on Silicon Valley has prompted accusations from some in the United States that the European Union is unfairly targeting American companies. Officials in the bloc vigorously deny those claims.

Still, in recent years, Ms. Vestager has demanded that Apple repay $14.5 billion in back taxes in Ireland, opened an investigation into Amazon’s tax practices in Europe and raised concerns about Facebook’s gathering and handling of data. The companies deny any wrongdoing.

In targeting the activities of these digital giants, experts say, European authorities are laying down a marker for more hands-on control of how the digital world operates. And while the $2.7 billion fine announced on Tuesday is tiny compared with Google’s $90 billion in annual revenue, it highlights the region’s willingness to dole out sizable penalties.

While the fine will garner attention, the focus will most likely shift quickly to the changes that Google will have to make to comply with the antitrust decision, potentially leaving it vulnerable to regular monitoring of its closely guarded search algorithm.

Europe’s latest efforts to rein in technology companies stem from continuing unease that Silicon Valley has come to dominate how the continent’s 500 million citizens interact online.

Click here to continue reading…

SOURCE: MARK SCOTT 
The New York Times