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Google faces $43 million antitrust fine in Australia

Yahoo Finance's Alexis Keenan discusses Google having to pay a $43 million fine in Australia and what that signals about antitrust regulatory activity for Big Tech.

Video Transcript

BRIAN CHEUNG: Well, shifting gears now. The global nature of Google's battle against antitrust regulators is increasingly apparent with legal pushback in Europe, the United States, and now Australia. The advertising giant ordered to pay about $43 million in antitrust penalties. Joining us now, Yahoo Finance's Alexis Keenan. What was the basis of this? And you know, $43 million is kind of a drop for Google.

ALEXIS KEENAN: Chump change, right?

BRIAN CHEUNG: Yeah, chump change. But what is the significance of that fine there?

ALEXIS KEENAN: Yeah, so this is Australia's federal court. And their regulator imposing this fine, $43 million, doesn't seem like a lot. And what they said is that their Android users, 1.3 million approximately-- they estimate that number-- that they had some misleading information given to them by Google on their mobile devices about location tracking.

They said that they were led to believe that if they turned off a certain feature for location tracking that then they wouldn't be followed. But instead, that there was another feature that they didn't-- that Google didn't inform customers about that, in fact, did track them across apps as well as web browsing. And so that's what this fine is about.

But what it does really is kind of highlight and underscore the growing global nature of these antitrust claims against Google. So in response, though, Google has said this, they have addressed this problem. It is changed. They said, "We've invested heavily in making location information simple to manage and easy to understand with industry-first tools like auto-delete controls, while significantly minimizing the amount of data stored."

So a decision there for Australia. And of course, so many other antitrust issues for Google and other big tech across the globe.

BRIAN CHEUNG: Well, and the reason why we're watching this so closely is because now there's kind of these rumors that perhaps the Department of Justice here stateside might be getting ready to sue Google over the ad market.


BRIAN CHEUNG: Very soon apparently. Well, what are you hearing about that?

ALEXIS KEENAN: Maybe. Maybe. So the expectation is that the Justice Department's long investigation--

BRIAN CHEUNG: Right, because this has been happening.

ALEXIS KEENAN: It has been happening. And it has been happening on multiple fronts. So this lawsuit that is expected sometime in September is what we're thinking. Is that it will go after the online advertising market for Google.

Now, if you remember back in 2020, the Justice Department brought its first case, first antitrust case against Google and that was directed at its online search market. So a little bit different animals here.

But if you just take a look, I want to show you the scope of some of the government antitrust litigation already pending against Google. So you have that 2020 case there, the search market case for the Justice Department. And then you have a number of lawsuits from states.

You have one in 2020 going after the ad market from a group of attorneys general. You have another one in 2020 going after search and ad markets. And also, you have another group of states going after Google just last year for their App Store fees. And that's much like the Apple case where app developers are upset that the commissions that go into the App Store.

So just a lot of overlapping antitrust cases there. And then added to that, you have private plaintiffs that are also going against Google on an antitrust level.

BRIAN CHEUNG: And then lastly here, I mean, you know, again, we need to wait until the lawsuit actually gets, you know, filed and it hits the printer. But what's the next step after that? Let's say, for example, it does happen in September. What happened-- what does Google have to do after that?

ALEXIS KEENAN: So usually there's a time to respond, 30 to 60 days to respond. And this will take years. All of these cases are many, many years down the road barring a settlement. The company could, of course, reach a settlement, which they have done in the European Union. They have fought long and hard against the European Commission, which has also just passed a bunch of laws that the company is now going to have to comply with.

But broadly, though, the Justice Department bringing these cases is much more serious than the state level complaints. And the reason is because it makes it a lot tougher for Google to defend themselves against private plaintiffs. That's the big deal here. If the Justice Department wins, if they have a victory on these levels, that means that all private plaintiffs have to do is show damages. They no longer have to prove the case because--

BRIAN CHEUNG: Intersting.

ALEXIS KEENAN: --the Justice Department, if they win, they will already have that victory and say, you violated antitrust laws. And so that just opens up a much bigger can of worms for the company.

BRIAN CHEUNG: All right, we'll have to continue to keep a watch on that. Yahoo Finance's Alexis Keenan, thanks so much for the breakdown there.