Google slapped with $2.7B fine for rigging search results with monopolistic algorithms

Friday, July 14, 2017 by

For seven years, the European regulators have been investigating Google’s business practices and the company’s overarching dominance in searches and smartphones, reports The Guardian. Unlike the U.S. Federal Trade Commission (FTC), who opted not to pursue any similar charges in 2013, EU regulators found that Google “artificially and illegally” pushed “its own price comparison service in searches” and slapped a record €2.42bn fine, or $2.7 billion. The ruling also includes demands that Google stop these activities within three months, as well as give an explanation of ” how it will reform its ways.” If they don’t, they could face fines up to €10.6m a day.

Margrethe Vestager, as reported by Bloomberg, is the popular Danish politician in charge of making these decisions as the “EU’s directorate for competition.” She’s been in the ring before with large corporate entities. In late summer of 2016, Vestager was instrumental in ruling that Apple, Inc. pay Ireland $14 billion in back taxes and interest after she concluded that Apple had been granted these benefits illegally. Current cases on her plate include investigations into McDonald’s and Amazon, which are being looked at in their “tax deals with Luxembourg.”

Apple CEO Tim Cook was most displeased by Ms. Vestagers ruling. He called it “total political crap.” Since U.S. Treasury department officials usually get their way, she’s not real popular with them either. They’ve accused her of being a “supranational tax authority.” But the name calling and U.S pressure doesn’t dissuade Vestager from diligent investigation. Her work philosophy holds that maxim that a “well policed economy yields the largest and most widespread benefits for society.”

Google officials disagreed with Ms. Vestager’s assessment of their business practices and were, at first, considering an appeal. But recent comments to CNBC indicate that Google may just pay the fine with the suggestion that an “appeal might not work.” That may be true. After looking at over 1.7 billion searches in the EU investigation, it was evident that those ubiquitous Google algorithms were found to “consistently give prominent placement to its own comparison shopping services.” European business were, in a very visceral way, simply being shut out. Vestager was clear in her decision that EU companies suffered losses due to this unfair dominance:

What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

Breitbart reports that Vestager has been accused with bias, a charge that she denies. The fine she has imposed against Google is the highest ever, exceeding a $1.9 billion fine handed out in 2009 to chip maker Intel. The fine levied on Google won’t really do much to their bottom line. They are holding $92 billion in cash and an additional $56 billion in various accounts outside of Europe. But the push back against the global technological titan could be a boon for other businesses, and alternate search engines, as well as entities like the Health Ranger Store, which offers a superior line of products, to have a shot at some fair competition.

Sources include:

TheGuardian.com

Bloomberg.com

Cnbc.com

Breitbart.com

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