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Google Could Face a $9 Billion EU Fine For Rigging Search Results In Its Favor (independent.co.uk)

Posted by BeauHD on from the distorted-search-results dept.

schwit1 quotes a report from The Independent: EU antitrust regulators aim to slap a hefty fine on Alphabet unit Google over its shopping service before the summer break in August, two people familiar with the matter said, setting the stage for two other cases involving the U.S. company. The European Commission's decision will come after a seven-year investigation into the world's most popular internet search engine was triggered by scores of complaints from both U.S. and European rivals. Fines for companies found guilty of breaching EU antitrust rules can reach 10 percent of their global turnover, which in Google's case could be about $9 billion of its 2016 turnover. Apart from the fine, the Commission will tell Google to stop its alleged anti-competitive practices but it is not clear what measures it will order the company to adopt to ensure that rivals get equal treatment in internet shopping results. The company has also been charged with using its Android mobile operating system to squeeze out rivals and with blocking competitors in online search advertising related to its "AdSense for Search" platform. The platform allows Google to act as an intermediary for websites such as online retailers, telecoms operators or newspapers. The Commission has warned of massive fines in both cases.

45 of 86 comments (clear)

  1. "Rigging"? by Frosty+Piss · · Score: 4, Insightful

    Apart from the fine, the Commission will tell Google to stop its alleged anti-competitive practices but it is not clear what measures it will order the company to adopt to ensure that rivals get equal treatment in internet shopping results.

    It's Google's product , it's not some public resource that Google manages for the good of society. Why shouldn't Google leverage their own product which exists solely to generate profit for Google? There is always Bing.

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    If you want news from today, you have to come back tomorrow.
    1. Re:"Rigging"? by KermodeBear · · Score: 3, Interesting

      Precisely. It isn't as if they hide everyone else's products. It isn't as if you're forced to use Google. If Google wants to put its own stuff at the top, what's wrong with that? It isn't as if someone is being tricked. "Gosh, gMail, Google' email product, I wonder if that has anything to do with - MY GOD, IT DOES! THOSE BASTARDS TRICKED ME!"

      This is the same kind of crap with Microsoft having IE as the default browser.

      Am I supposed to be enraged because when I buy a Ford they have Ford-designed headlights?

      --
      Love sees no species.
    2. Re:"Rigging"? by Shinobi · · Score: 2

      Why shouldn't Microsoft be allowed to leverage their product and solely allow Edge on Windows, and redirect all Google searches to Bing instead?

    3. Re:"Rigging"? by JaredOfEuropa · · Score: 4, Interesting

      Nope. In Europe at least, you have to stick to a few additional rules if you enjoy (near) market dominance. For instance, you may not use that monopoly to create an unfair advantage selling or promoting other products or services you're offering. Microsoft got done for using their monopoly on the desktop to push Internet Explorer, which was deemed a product separate from the OS. I'm not sure what Google is being accused of here, but it sounds like they are using their search engine and/or AdSense to promote their own stuff at the expense of their competitors.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    4. Re:"Rigging"? by Frosty+Piss · · Score: 2, Insightful

      Why shouldn't Microsoft be allowed to leverage their product and solely allow Edge on Windows, and redirect all Google searches to Bing instead?

      There is a difference between an operating system and a web site.

      And, Edge is the default browser for IE and the only one that ships with Windows. Of course people are free to use Chrome of Firefox or several others, and people are free to use Bing instead of Goole.

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      If you want news from today, you have to come back tomorrow.
    5. Re:"Rigging"? by Frosty+Piss · · Score: 1

      For instance, you may not use that monopoly to create an unfair advantage selling or promoting other products or services you're offering.

      It may be "dominant", but it's not a "monopoly".

      --
      If you want news from today, you have to come back tomorrow.
    6. Re:"Rigging"? by Anonymous Coward · · Score: 2, Insightful

      There is a difference between an operating system and a web site.

      In this context, no there isn't.

    7. Re:"Rigging"? by rahvin112 · · Score: 3, Insightful

      In a normal circumstance I agree completely. I think the EU is off base here because there is no barrier of entry to search, ad's or commercial sales of any kind. There are more than a half a dozen search engines, dozens of ad companies and hundreds of competing stores.

      Nothing at all stops consumers from switching. For that reason alone the EU is off base with any kind of fine. I have no doubt that this fine is being leveled for tax reasons and has nothing at all to do with competition.

    8. Re:"Rigging"? by Anonymous Coward · · Score: 2

      It's Google's product , it's not some public resource that Google manages for the good of society. Why shouldn't Google leverage their own product which exists solely to generate profit for Google? There is always Bing.

      It's a public court , it's not some private resource that the government manages for the good of Google. Why shouldn't the government leverage their own courts which exists solely to generate profit for society? There is always Somalila.

    9. Re: "Rigging"? by Anonymous Coward · · Score: 1

      Not true. Many EU-based companies have also been slapped with these fines.

    10. Re:"Rigging"? by Cyberax · · Score: 3, Insightful

      It doesn't matter if there are competitors - if you HAVE a monopoly then you're regulated. It's that simple.

    11. Re:"Rigging"? by JaredOfEuropa · · Score: 4, Insightful

      It's not about Google's dominance in any of these areas; the EU doesn't care per se if Google is the most popular search engine or mobile OS. It's about Google using their dominance in one area to gain an advantage in another that the Commission takes issue with.

      A friend of mine used to run a fairly popular web shop. He told me that the difference between being the top ranked result on Google and being down to 3rd of 4th made an immediate and sizable impact on his revenue. That's all well and good if you only have regular competitors... but what if you are selling what Alphabet is also selling, and they put their own shop at the top and bump you down to page 2? Sure, you were free to start your own business, take out some more ads, and anyone is free to switch to Bing, but if you compete with Google and they bump you off the search results, you can be sure your sales are going to take a massive hit as no one is going to find you.

      In other words: the more dominant your service is in the market, the more neutral the Commission expects you to be. Especially in places like search engines and ad rotation where the customer expects neutrality.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    12. Re: "Rigging"? by saloomy · · Score: 1

      Google is a privately operated website, with privately operated storefronts. How can a law mandate that a website have content it doesn't want to? Should CDW show prices and wares from PCConnection next? Please....

    13. Re: "Rigging"? by TheOuterLinux · · Score: 1

      They bubble your searches so that you're more likely to click on something that may be sponsored. The problem with this is rather than being informed objectively, you're be subjected. Google "Trump" with a friend with different political beliefs at the same time and see the huge difference in search results. It has nothing to do with new pages. So even if Google doesn't have an agenda, it and other cookie munching software like Facebook just shove news and ads in your face that's never going to help you make any actual informed choices.

    14. Re:"Rigging"? by Actually,+I+do+RTFA · · Score: 1

      Did you complain about Microsoft bundling IE? If they hadn't been stopped, there would be no Google. IE would block it, and Netscape Navigator just wouldn't install. Chrome and Android wouldn't exist.

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    15. Re:"Rigging"? by ShanghaiBill · · Score: 2

      It may be "dominant", but it's not a "monopoly".

      Standard Oil and AT&T were not monopolies either, but the courts in both America and Europe have long applied antitrust laws to companies that were short of an absolute monopoly.

    16. Re: "Rigging"? by Barsteward · · Score: 2

      no, but its a market with rules to try and keep it a level playing field

      --
      "The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
    17. Re:"Rigging"? by TheRaven64 · · Score: 4, Informative

      The legal and economic definitions of a monopoly are different (in the US as well as the EU). A monopoly in the economic sense is a single supplier for whom there is no competition, which can therefore exert massive influence over the market. A monopoly in the legal sense is a company with a sufficiently large market share that they can act as if they were a monopoly. In the EU, Google has over 90% of the search engine market. This means that, in terms of economic impact, the other players are largely irrelevant. If Google searches are rigged to push Google products, then this will affect almost as many consumers as if they had a monopoly in the traditional economic sense and will have the same impact on the market.

      This is exactly the same situation that Microsoft was in with Windows. They didn't have 100% of the desktop market, but they had a large enough share that the remaining players between them had basically no impact on the market.

      --
      I am TheRaven on Soylent News
    18. Re:"Rigging"? by Barsteward · · Score: 2

      there are a few definitions of Monopoly - 1. exclusive control of a commodity or service in a particular market 2. a control that makes possible the manipulation of prices.

      --
      "The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
    19. Re:"Rigging"? by Barsteward · · Score: 2

      Google doesn't have to trade in the EU if it doesn't like a level playing field or the rules to play by

      --
      "The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
    20. Re:"Rigging"? by AmiMoJo · · Score: 1

      If you recall, the EU took Microsoft to task over bundling IE and Media Player. They forced them to have the browser choice screen and offer a version of Windows without Media Player.

      --
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      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    21. Re:"Rigging"? by Cyberax · · Score: 1

      Think about it, if you go by your definition then any company can avoid being a monopoly. Just set up a fake "competitor" company with 1 token client and you have a "Get out of jail free" card.

  2. Re:Excessive EU Regulation by Anonymous Coward · · Score: 2, Informative

    Wrong. In fact the EU has the exclusive right to tell every business operating within its territory what they are and are not allowed to do, especially in terms of stifling competition (hint: its a big no).

  3. Re: Excessive EU Regulation by Anonymous Coward · · Score: 1

    No, Google is effectively an EU company when it delivers any services in EU territory; it is subject to the same laws.

  4. A Bureaucrat Didn't Get His Bribe. by DatbeDank · · Score: 1

    Sounds like there's a budget short fall somewhere in the EU and since Google didn't pay the lobbyist (erh bribe) they're getting dinged a cool $9 billion.

  5. Re: Excessive EU Regulation by Anonymous Coward · · Score: 5, Informative

    Google is an American company, but the EU is intent on pushing their laws beyond their borders.

    No... Google operates in Europe, has offices and headquarters in Europe, and must thereby follow European law. You do not get to break local laws just because you also have offices somewhere else.

  6. silliness by supernova87a · · Score: 2

    This article, first of all, is so vapid and devoid of updated actual information it's embarrassing. Which case is it? Link to the docket / documents? If Slashdot could choose it's sources better, that would be great, thanks...

    Second, and more on content -- these vapid articles always quote the maximum fine because they can't be bothered to do the research to figure out what part of the ruling is applicable. Sure, a $100B company *could* be fined 10% according to the legislation, but if you dig into the details, what court / ruling would actually fine an entire company for a relatively separate and contained part of its business? And could all of Alphabet parent actually be fined for it's one product in one region? Umm... maybe that would be the more reasonable thing to explain. The answer is pretty much, "no".

    Finally, if Google takes the position that all it is providing is opinions on search results and links to websites that it finds interesting, how can it be sued for ranking one thing higher than another? Unless the EU commission takes an overly expansive view of the term "monopoly"?

    I am a little surprised at how open Europeans are to their own form of religious zealotry compared to Americans-- which comes in the pursuing vague notions of privacy and competition without regard to practicality....

    1. Re:silliness by angel'o'sphere · · Score: 1

      When you go to a lawyer, you want a honest opinion.
      When you go toa doctor, you want a honest opinion.

      Google is screewing up search results depending on which device I google, which or if I'm logged in witha google account or plenty of other circumstances.

      Stuff I found easily last year suddenly vanishes from its search results.

      There is stuff listed in the results that does not even is related to my search query.

      And if you want to refer to Bing, bing is such a bad search engine it is close to unuseable. I enter an english search query and it only lists german sites as results because I 'googled' from grrmany .... how brain dead.

      Sponsort results in google results or advertizing is clearly marked, no one cares about that. But the order and ranking and weight of search results makes no sense any more ... it varies from day to day.

      --
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    2. Re:silliness by PJ6 · · Score: 1

      I am a little surprised at how open Europeans are to their own form of religious zealotry compared to Americans-- which comes in the pursuing vague notions of privacy and competition without regard to practicality....

      An American calling Europeans religious zealots... wow, that's rich.

      And how is "I don't want my ISP to sell my browsing history" in any way vague, or impractical?

    3. Re:silliness by Actually,+I+do+RTFA · · Score: 1

      could all of Alphabet parent actually be fined for it's one product in one region?

      It can be fined up to whatever the assets it has in that region, certainly, and posisbly more. Depends on their treaty with America.

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    4. Re:silliness by thegarbz · · Score: 1

      To be clear here, are you thinking that Europeans have the kind of emotional attachment to privacy laws that Americans have to capitalism or bear arms? If so you should actually get out and meet some Europeans sometime. Most of them couldn't give two shits about what goes on in the European courts.

      But we do have some religious zealotry: Worker protection laws, workers rights laws, and generally any laws that don't let companies screw us for yet another dime.

      That said I don't find any of the principles in the laws here impractical. Sure there were a few impractical cases as determined by the occasional stupid court, but that has more to do with stupid courts than impractical ideas: e.g. Ruling it's not sufficient to just ban content on Google.de and instead requiring a wider ban. That's impractical, and you also won't find many people defending that idea.

  7. Abuse of market power by SeattleLawGuy · · Score: 1

    Apart from the fine, the Commission will tell Google to stop its alleged anti-competitive practices but it is not clear what measures it will order the company to adopt to ensure that rivals get equal treatment in internet shopping results.

    It's Google's product , it's not some public resource that Google manages for the good of society. Why shouldn't Google leverage their own product which exists solely to generate profit for Google? There is always Bing.

    It's something called "abuse of market power" and it's anticompetitive. It's basically where an organization uses its existing market power in a way which prevents other producers from competing or limits their competition in a way which hurts consumers. It's one of those places where unfettered capitalism hurts the consumer and is anticompetitive, hence the need for some regulation.

    For example, if Google always shows Android tablets first first and hides apple or windows tablets someone would otherwise consider buying from her search results, that harms marketplace competition and hurts the customer.

    The bigger controversy with antitrust type actions is the frequency with which they are used by countries to tax foreign businesses. I believe there is something of a double standard in many countries where foreign companies fundamentally are penalized for not being local. They may also be engaging in anticompetitive activity, but would a local company be held to the same standard?

    --
    Real lawyers write in C++
  8. googles road to evil by random_poster · · Score: 1

    google road to evil begins
    http://techland.time.com/2012/...
    http://www.infoworld.com/artic...

    google secretly embraces evil
    http://time.com/4060575/alphab...

    google realizes full power of the dark side
    http://www.npr.org/sections/th...
    http://www.wired.co.uk/article...
    http://www.computerworld.com/a...

    RIP google privacy,ethics,trust
    https://en.wikipedia.org/wiki/...

  9. Wait, what? by Altrag · · Score: 1

    Fines for companies found guilty of breaching EU antitrust rules can reach 10 percent of their global turnover

    I hope I'm misreading something here (or the article author was..), but it sounds like Google could in theory be paying more in fines than they actually earned?

    Doing some cross-checking it sounds like that $90b "turnover" is their pre-expense revenue. Their profit after expenses is more like $20b, from their own earnings report.

    So a $9b fine is almost half of their entire global profits. In fact, according to this site, only around $8b of that profit was generated in the "EMEA" region (Europe, Middle East and Africa -- so that's still more than just the EU itself.)

    When you're talking about having to pay out an entire year's profit, plus an additional billion dollars, plus however much cost for additional development needed to avoid future fines, you have to start wondering if its still worth operating in that region at all.

    1. Re:Wait, what? by Anonymous Coward · · Score: 1

      You mean, worth operating while acting illegally? No, its not. That's the point. Follow the law, respect the common market, make money.

    2. Re:Wait, what? by Altrag · · Score: 1

      No, I mean worth it at all. As in, tell the EU to go fuck themselves and invest their $9b elsewhere rather than using it to pay the fine and (effectively) taking over a year of $0 profit from the region.

      I didn't even add in the fact that revenue will presumably decline when they aren't operating illegally.

    3. Re:Wait, what? by Tranzistors · · Score: 2

      As in, tell the EU to go fuck themselves

      I don't see the downside for EU. If consumers in EU are getting inferior product because of improper conduct by Google, then what is the harm in them leaving? It's not like Google provides services that no one else doses.

    4. Re:Wait, what? by Altrag · · Score: 1

      So you're a happy Bing user then?

      The downside for the EU is a hell of a lot of pissed off EU residents when they're suddenly no longer able to use Google's search because Google improperly promoted their shopping service (they have one of those? Huh.. so they do) half a decade ago. Though I guess it might still be ongoing.. TFA wasn't clear on that point.

    5. Re:Wait, what? by Jzanu · · Score: 2

      Rather, it is the EU that will force google to either pay or suspend its service offerings. An illegal company isn't contributing to the economy properly, and isn't one you want crowding out others that actually comply with the laws on fair markets, those that underpin the entire strength of the EU. This isn't some piss-ant laughing matter, it is one that will actually get the full brunt of enforcement actions.

    6. Re:Wait, what? by Tranzistors · · Score: 1

      So you're a happy Bing user then?

      No. I don't use Bing. I use Google and Yahoo. And neither of those make me happy.

      But back to the topic. It is extremely unlikely that Google would exit EU market over this. It would make sense only if their search business was a net loss. Which is unlikely.

    7. Re:Wait, what? by Barsteward · · Score: 1

      the fine is potential 10% of revenue, not profits

      --
      "The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
    8. Re:Wait, what? by Anonymous Coward · · Score: 1

      Somehow shareholders don't share your viewpoint. Do you know of any company that actually left our EU market? Did not think so. I'll leave it to you to try to figure out why...

  10. Scores of complaints from Google rivals by najajomo · · Score: 1

    "The European Commission's decision will come after a seven-year investigation into the world's most popular internet search engine was triggered by scores of complaints from both U.S. and European rivals." Most of who are fronting for the Microsoft organization. You don't have to look far to find the Micrsoft connection:

    CompTIA

    Computing Technology Industry Association

    Initiative for a Competitive Online Marketplace (ICOMP)

    Association for Competitive Technology (ACT)

    FairSearch

    TradeComet

    'Center for the Moral Defense of Capitalism' .. that's a real organization .. spends most of the time defending MICROS~1 :)

    1. Re:Scores of complaints from Google rivals by Jzanu · · Score: 1

      If google tries to deny responsibility and refuses to fix these defects then they face being locked out of the largest growing industrial markets. They can survive in the USA alone, but they won't be growing, and stockholders won't like that outcome - google will comply.

    2. Re:Scores of complaints from Google rivals by najajomo · · Score: 1

      @Jzanu: "If google tries to deny responsibility and refuses to fix these defects then they face being locked out of the largest growing industrial markets. They can survive in the USA alone, but they won't be growing, and stockholders won't like that outcome - google will comply."

      Nobody is forced to use Google ..