Unraveling the $2.7b Antitrust Fine Imposed on Google by the European Commission

The European Commission has recently put Google under the spotlight, alleging that the American Internet powerhouse has pushed search users unfairly towards its own shopping platform. Lodging what can be deemed as an antitrust lawsuit, the Commission’s claim insists that Google unjustly prioritizes its own services, often relegating links of competitor services to less visible areas where a click becomes unlikely.

Margrethe Vestager, a name that stands out for her involvement in previous cases against heavyweights such as Apple and Facebook, is leading the charge against Google. “What Google has done is illegal under EU antitrust rules,” she asserts. Vestager, the European Union’s chief antitrust official, claims that Google has effectively denied other companies the opportunity to compete fairly and innovate, thereby denying European consumers access to a genuine selection of services and benefits of innovation.

In response to these allegations, Google has been hit with a significant penalty — a staggering fine of $2.7 billion. However, the fine could mount if Google fails to cease the practices it’s accused of. A spokesperson from Google has expressed the company’s respectful disagreement with the European Commission’s conclusions and stated, “We will review the Commission’s decision in detail as we consider an appeal, and we look forward to making our case.”

While Google might be contesting the decision, some observers note that the outcome could have been much worse. The company could have been fined up to 10 percent of its annual sales, an amount that approaches a massive $9 billion. The actual fine of $2.7 billion, while hefty, represents just about 2.5 percent of Google’s revenue last year — Alphabet, Google’s parent company, had reserves of around $92 billion in cash as of March this year.

Europe is no stranger to confronting American tech giants over legal and ethical issues. The continent has a considerable history of imposing fines on these firms; tech giant Intel was fined $1.2 billion back in 2009, Apple was demanded to repay $14 billion in alleged tax breaks from the Irish government, and Facebook was penalized for misleading European authorities during its $19 billion acquisition of WhatsApp.

Furthermore, in September 2016, the European Commission mooted plans to allow artists to demand remuneration from sites such as Google, YouTube, Vimeo, and Dailymotion where they felt they weren’t adequately compensated.

Many observers see this series of actions as Europe holding American giants to accountable for their operations, or perhaps pushing them to adapt more towards European norms and values. An illustrative case can be seen in the implementation of the “Right to be Forgotten” in Europe, which allows users to request Google to erase their complete internet history upon their discretion.

With all these occurrences, the EU has successfully portrayed the narrative that American firms are not being singled out for penalties. Vestager has stressed that they were not bias on their part; they acted strictly based on the evidence and allegations they analyzed.