In recent news, Alphabet Inc. GOOGL was hit by a record-breaking $5 billion fine by EU regulators for breaking antitrust laws. According to The New York Times, this steep antitrust penalty is among one of the most aggressive regulatory moves ever made against an American technology company. The fine comes from Google abusing its Android market dominance in three different areas. The three areas outlined include Google bundling its search engine and Chrome apps into the operating system; blocking phone makers from creating devices that run forked versions of Android; and paying large manufacturers to bundle the Google search app on handsets, according to The Verge.
What this Fine Means for Google
This is the second time Google has been fined. They were fined last year by the EU for about $2.8 billion over the company's unfair favoring of its own services. However, this time around, European authorities are more aggressive towards regulating technology firms in areas related to antitrust, privacy, and the spread of misinformation.
The European Commission wants Google to put an end to their illegal conduct within 90 days of the decision. However, Google plans to appeal the decision, as they believe Android has created more choice for everyone, not less. At this point, the company does not seem worried. Seeing as this has happened before and since Google wants to appeal, this case could go on for years.
At this point, Google will have to deposit a fine which will be held during the legal process. If Google loses the appeal, then the fine will end up being distributed amongst the EU’s member states.
Currently, GOOGL’s stock has fallen 0.24% with little fluctuation since the news of the fine. Since Google was first fined by the EU last year, they have been investigating Android more closely after rivals complained that Google was dominating the market. However, if you look at GOOGL’s revenue over the past year, it has grown from around $75 billion to $111 billion. Even with this fine in place, customers still want to buy Google’s services and products and remain loyal.
Similar Cases in the Past
Many cases like this one have occurred in the past, with the same problem at hand. Similarly,, many large tech firms like Facebook FB, Intel INTC, and Microsoft MSFT have all received antitrust fines from the EU. Like Google, Microsoft was fined twice in the past after the company didn’t include a browser ballot in one of its new Windows updates. However, it could be possible that this ruling is swept under the rug, seeing as Europe is the only one who acted alone in taking action against these Silicon Valley companies. In the past, regulators in the US have given companies innovative freedom and allowed tech companies to expand the way they want to.
Although there are certain restrictions and regulations for every company, no one has really had a big issue with any company, especially within the United States in the past.
As of now, all Google can do is wait this out since they have already decided to appeal the decision made by the commission. The company itself is doing well amongst its customers, and not reeling from any revenue losses at the moment.
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