The European Union (EU) has fined Google a record-breaking 2.4 billion-euro ($2.7 billion) in what is just a fraction of the costs from the EU’s demand that the Internet giant stop skewing search results to favour its own shopping site gaining ‘undue’ dominance in so doing.
To some smaller businesses, this might mean ‘torn apart’, but for the search engine giant, the penalty will barely make a dent in its cash hoard of $90 billion in ad revenue.
According to a latest PriceWaterhouseCoopers (PwC) Entertainment and Media Global Outlook, two-thirds of all global ad dollars this year will go to Google, Facebook, Tencent, Baidu and Alibaba, that have been tagged the Big Five.
The Big Five are reportedly crushing everyone else in the new media world, and this has raised a lot of concerns.
While European politicians have called on the EU to sanction Google or even break it up for the undue dominance, US critics claim EU regulators are targeting successful American firms.
A ruling by EU antitrust chief, Margrethe Vestager, has now put an end to concerns in Europe, and raised eyebrows in the US.
“Vestager gave Google a 90-day ultimatum to find ways to give equal treatment to smaller price-comparison services that compete with the Google Shopping ads that appear when people search for products.
“The EU will also monitor Google for five years and can force the company to pay additional fines of up to 5 percent of its daily revenue if it doesn’t comply,” according to Bloomberg.
Meanwhile the search engine giant is to pay a fine towering $2.7 billion to the European Commission.
Vestager’s decision marks the end of a seven-year probe fuelled by complaints from small shopping websites as well as bigger names, including News Corp., Axel Springer SE and Microsoft Corp.
A lawyer for Norton Rose Fulbright in Brussels, Jay Modrall said Google will have “the sword of Damocles hanging over its head” further stressing that this is because it is no longer the firm’s choice on how it makes changes to allay EU concerns. Instead, according to the legal practitioner, Google is “under a legal requirement to do so and under notice that if its commitments are not sufficient, it’ll be fined even more”.
And according to a binding order from the European Commission, Google must “stop its illegal conduct” and give equal treatment to rival price-comparison services.