EU Hits Google With Record Fine of $2.7 Billion

EU Hits Google With Record Fine of $2.7 Billion

European competition commissioner Margrethe Vestager speaks on April 15, 2015 in Brussels as the EU formally charged Google with abusing its dominant position as Europe’s top search engine, laying the US Internet giant open to a massive fine.

JOHN THYS/AFP/Getty Images

The European Union has just unleashed its largest fine ever, but this is only one of the first strikes in a war for market dominance.

By Josué Michels • June 30

On Tuesday, June 27, the European Union filed a historic fine against Alphabet Inc.’s popular search engine for $2.7 billion. The EU accused Google of displaying its own online shopping services predominantly in its search results and leaving competitors with a disadvantage. The European Commission gave Google 90 days to change the display of its search results to avoid further penalties.

Several hundred million Europeans use the popular search engine. One of Google’s services is to provide its users with an online shopping tool. If you, for example, google “smartphones” in the search engine Google Shopping, you will find various offers that supposedly lead you to the best deal. The easy access, attractive display and quick results draw millions of users.

However, the first offers you see are those from distributors or manufacturers that have contracts with Google.

The search engine claims to lead its users to the best offers and treat search results equally; the European Commission believes that this trust has been abused and many domestic companies have suffered from it. European Commissioner for Competition Margrethe Vestager tweeted:

Google now has to change its makeup quickly. The European Commission gave the Internet giant only 90 days to make its search engine friendlier compared to rival online services. If Google doesn’t act, the Commission threatens to obligate its parent company, Alphabet, to pay up to 5 percent of its average worldwide daily turnover.

The goals of the European Commission are not much different from those of United States President Donald Trump. Trump seeks to harm the German car industry and steel production to strengthen those of the U.S.; the European Commission seeks to harm U.S. Internet giants to support Europeans.

Google is not the only target of recent attacks. In recent years, the Federal Cartel Office (fco) successfully led charges against Amazon and well-known hotel bookings services, forcing them to abandon the so-called best-price clauses. These clauses obligate companies to offer their best deals only at their websites.

The German Cartel Office also launched proceedings against Facebook. The agency accused the media giant of violating its dominant position on the market for social networks by violating data protection regulations. fco president Andreas Mundt told Handelsblatt that he hoped to have a breakthrough against Facebook later this year.

The main thing the EU and Germany are upset about is that European rivals don’t stand a chance against American Internet giants such as Google, Facebook, Amazon, etc. Although Europe has made multiple attempts to be competitive, all fade in the shadow of their American rivals.

The recent Google fine gives us a pretty good idea of what the EU has set its mind on—ending America’s high-tech dominance. To learn more about where these trade wars are heading, read our article “Trade Wars Have Begun.”