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The Evil Google Finally Met Its Match – Fined A Record €2,424,495,000 In EU



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Jun 28 2017
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How do you deal with an evil monster you cannot possibly beat? You either join the monster or leave the monster alone; hoping that one day a bigger monster would deal with it. After all, how could you fight a US$650 billion mighty company? First introduced around 2000, “Don’t Be Evil” has been the motto of Google’s corporate code of conduct.

 

Turns out, Google is itself the biggest evil in the Internet. From publishers whose Adsense accounts were closed while their money confiscated without a proper justification, to businesses that lost its competitiveness and profits because Google rigged its search results, the American technology company is absolutely very evil.

Google Question - Don't Be Evil, Unless It's Profitable

In actuality, Google had already admitted its own evilness when Alphabet, which took over as Google’s new holding company in 2015, dropped the tech giant’s “Don’t Be Evil” mantra from its code of conduct. Founders Larry Page and Sergey Brin initially incorporated the slogan as a sign of the company’s independence. Not anymore!

 

Today, Google would do anything, including the evil things, in the name of making money. And that’s precisely what the European Union has just concluded. In its latest ruling, the EU antitrust has slapped the search giant a record €2.42 billion (US$2.73 billion; £2.13 billion; RM11.7 billion) fine for unfairly favouring some of its own search services over those of rivals.

Google Motto - Don't Be Evil

In an 8-K filed with the United States Securities and Exchange Commission, Google said it will “review the formal decision”, but expects that it will just pay the fine and move forward. It doesn’t see much of a chance to win an appeal. After all, the US$2.73 billion fine is like loose change to the company, which makes US$90 billion in annual revenue.

 

So if you’re suing Google, like dozens of companies that have brought lawsuits claiming Google crushed them by abusing its dominance in internet searches, your work has just gotten easier. Rona Bar-Isaac, a partner at Addleshaw Goddard LLP, said – “Having the decision from the European Commission means they don’t have to prove infringement themselves.”

Google Fined 2.7 Billion US Dollars by European Union EU

What other companies need to do is to link that infringement back to whatever harm it is that Kelkoo and Foundem say they’ve suffered. Apparently, UK-based Kelkoo filed its lawsuit in December 2015 at a High Court, claiming Google has crippled its business by illegally exploiting its monopoly over internet searches, and was seeking damages.

 

Kelkoo was complaining that searching Google for “cheap televisions” will prominently display the search engine’s own service, putting rival comparison services like Kelkoo at a disadvantage. Richard Stables, its chief executive, said Kelkoo’s traffic from Google had dropped by around 95% in the last few years, causing its revenue to drop from €103 million in 2005 to €38.4 million in 2015.

Google UK Britain

Foundem filed a lawsuit against Google since 2013, seeking damages for revenue lost as a result of Google’s “anti-competitive conduct.” The UK’s shopping search engine claimed in the lawsuit that it had been unfairly penalized by Google because it offers a competing shopping comparison search service. It lost web traffic as a result of being pushed down in Google’s search rankings.

 

The new EU antitrust damages directive makes it easier for victims of anti-competitive practices to obtain damages. The ruling is long overdue. The EU has been investigating Google’s evil practice for over a 7-year period. While the U.S. has been soft on Google, European politicians have called on the EU to sanction Google or even break it up.

Google Evil - Abuses Dominance Google Shopping - Breakup

The EU commission found specific evidence of sudden drops of traffic to certain rival websites of 85% in the UK, up to 92% in Germany and 80% in France. And it was based on Google’s revenue from its comparison shopping service in the 13 countries where the illegality occurred that the company was slapped with a fine of €2,424,495,000.

 

The EU also reveals that ever since Google started changing its search function or algorithm in order to promote its own comparison shopping service, traffic to Google’s comparison shopping service increased 45-fold in the U.K. Perhaps the EU realizes that only they (not even the U.S.) are able to stand up to Google, hence the deliberate harsh penalty.

EU Commissioner for Competition Margrethe Vestager

Margrethe Vestager, Europe’s antitrust chief, said – “In Europe, companies must compete on the merits regardless if they are European or not. What Google has done is illegal under EU antitrust rules.” Ms. Vestager has also demanded that Apple repay US$14.5 billion in back taxes in Ireland and opened an investigation into Amazon’s tax practices in Europe.

 

But the financial penalty isn’t what worries Google. What are of Google’s concern are the changes that the American tech giant will have to make in order to comply with the antitrust decision. That would leave Google vulnerable to EU’s regular monitoring of its closely guarded search algorithm. Of course, there’s always the financial impact to its shareholders.

Google - Don't Be Evil - Monopoly

Considering Google holds a market share of more than 90% in Europe’s online search, any changes to its search algorithms would deal a bloody blow to its revenue. By not being able to artificially and illegally promote its own price comparison service in searches anymore, essentially competitors would eat into the chunk of profits that Google is currently enjoying for itself.

 

Under European rules, the company – and not the regulator – must come up with proposals to guarantee that it treats competitors fairly when people make online search queries. And the authorities can demand that Google make further changes if they are not satisfied with the initial proposals. While Google is untouchable in America, it’s a different battlefield in the EU.

Google Adsense

Despite the dramatic decision, it’s not the end of misfortune for the evil Google. The EU is continuing to probe the company over its Android mobile-operating system and its Adsense advertising service. Regulators are also investigating for any other evil and unfair practices in its provision of maps, images and information on local services.

 

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