Google to be hit with €1bn-plus EU penalty
European Competition chief Margarethe Vestager is set to hit Google with a fine potentially greater than €1bn for alleged market anti-competitive practices in what will be the latest slap-down of a US tech giant by the EU.
The European Commission’s decision will come after a seven-year investigation into the search engine triggered by scores of complaints from both US and European rivals.
In April 2015, the EU competition authority accused Google of distorting internet search results to favour its own shopping service, harming both rivals and consumers.
Google made three unsuccessful attempts to settle the case with the previous European Competition Commissioner Joaquin Almunia in a bid to stave off a possible fine and a finding of wrongdoing. Current Commissioner Margrethe Vestager, however, has shown no willingness to settle with Google.
A decision, and fine, had been expected in August, but the ‘Financial Times’ reported that Google is braced for a fine of potentially more than €1bn within weeks.
The EU has a long tradition of issuing major rulings just before officials quit Brussels for their summer break.
Google has always said it rejects the charges, claiming regulators ignored competition from online retailers Amazon and eBay when they made their initial assessment.
Read more: Facebook takes €110m hit from the iron lady of Brussels
The EU’s claims that Google Shopping results harm competition “are wrong as a matter of fact, law, and economics,” general counsel Kent Walker wrote in a blog post last year.
Fines for companies found guilty of breaching EU antitrust rules can reach 10pc of their global turnover, which in Google’s case could be about $9bn of its 2016 turnover.
Margrethe Vestager is famously not afraid to levy big fines. Her €13bn tax ruling against Apple and Ireland caused a global stir – even if that decision is being appealed.
A record fine for Google, which employs as many as 6,000 in Ireland, will also reignite tensions with the US. The EU has slapped major fines on Apple, Facebook, Intel and Microsoft in recent years, provoking claims of an anti-American bias.
However, last July the Commission ordered almost €3bn in fines for European truck makers Daimler, DAF, Iveco, MAN and Volvo/Renault for colluding to fix prices and dodge the costs of stricter pollution rules. (Additional reporting Reuters/Bloomberg)
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