A lot more information about the case is available here [0]. The ruling is about promoting Google Shopping results above other comparison shopping websites. The fine "has been calculated on the basis of the value of Google's revenue from its comparison shopping service in the 13 EEA countries concerned."
There used to be a ton of shopping "comparison" and "review" site spam. There still is. For a while google shopping seemed better. I actually liked google's involvement.
Then they seemed to turn into ads? Now I ignore it along with most of the others as I'm sure many folks do and just shop through a few places (which is only marginally better).
I think if Google cares about product search quality then it would be good. Now it’s just a paid product rather than trying to organize and present info.
It is less the tax laws and more the trade agreements between countries. Until a few years ago the biggest tech companies used a bit of creative accounting to make sure that all their EU profits would at least on paper be made in Ireland because it had the lowest taxes of all and Ireland had no reason to change that. The EU stepped in once it came out just how far the Irish tax office was willing to go to support that scheme, I think they outright allowed Apple to skip the pretense (and several shell companies) entirely while declaring their profits to be Irish.
One problem with these non-Google price comparison sites is that they don't always show the best or cheapest products but the products that give the best affiliate commissions to the sites.
Even Google shopping doesn't show the cheapest results. It's a paid-for service, and the seller who pays most places first. There used to be a free and paid tier, but now it's all paid.
Not commenting on Google, but the problem with monopolies is you don't know what other and potentially better products might exist now if there was fair competition. Companies aren't going to fund a competing product when they know they're against a powerful monopoly.
"But the company being accused of having a monopoly has the best product and I like it" was said about Windows too when they were locking out competition. It's short-sighted.
kieskeurig.nl/be, beslist.nl, kelkoo; all of which are relatively popular in just the Netherlands. Those are the few that survived by focusing on tiny niches; in this case a tiny geographic and language-demography.
https://market.yandex.ru (only in Russian). Exists for over 10 years. Was my to go place to shop for electronics due to extensive filtering. It actually still is even after moving to US: I just pick the device there, then order on BestBuy/Amazon/NewEgg.
Probably because the cases in question started in 2017. The headlines we see are the percolation of these three cases through the entire appeals and resolution process.
I hope they do and that the fine gets doubled as a result. Companies always appealing to the highest courts is only a function of the amount of cash they have, whatever happened to: "Judge says so, so that's it". It's just trying to do an end-run around the system by always clogging up the courts from low to high.
Honestly, just adding a market-rate interest charge on the original fine seems Good Enough to me. I suspect the interest on a $3B fine is larger than the court fees and lawyers anyways, and it's not like time value of money isn't something companies will neglect to take into account.
The fines shouldn't be tied to anything. The point of fines is to punish bad behavior. The fine is the incentive to change behavior. I don't want fines being tied to specific rewards for a subset of society or a special interest. Once you start doing that, the incentives are broken. The benefit to society is that Google changes their behavior to avoid being fined again. The money should go into general government funding, not to "schools" or any other specific thing.
I think the point the grandparent is making is that for a corporation, a fine is the price of bad behavior. Corporations don't make moral judgments between good and bad; as far as the company is concerned, they will make $X of profit from the behavior and it will cost $Y in fines, and if $X > $Y they will keep doing it. So for fines less than the profitability of the behavior, governments should just think of them as taxes, revenue-generation sources from continuing to allow the corporation to do whatever it's being fined for.
That's ludicrous. It should go back into the governing bodies who do this to hire more auditors and investigators and lawyers to do even more of the Lord's work.
I'm wondering what the effect would be if the money from the fines is burned (destroyed).
The company would still feel the same incentive. For the government on the other hand, it removes the incentive to fine for one's own gain. I like that it would remove this conflict of interest.
By removing the money, it's essentially very slightly reducing inflation.
While in theory this sounds nice, in practice it means everyone gets nothing. It's a rare case where I'd rather see the government get money. A comparable scenario is a class-action lawsuit; a company might lose a billion dollar class action lawsuit, but what that means is a third goes to lawyers, a third goes to administrative overhead, and the remaining third is distributed to the plaintiffs as a bunch of checks for 50 cents a piece (and then they're taxed on it!). I'd rather the government get one big check.
Legislation is often changed so as to target big companies in the industry du jour. Just look at how tenuous many of the prosecutions in France of Google are. They aren't aimed at market fairness even remotely, but to extract wealth to the state.
It's particularly noticeable because the regulations selectively enforced are usually a huge hindrance to market entrants.
I believe the parent was referring to things like GDPR which may have the unintended consequence of more entrenching the large incumbents because of the cost and time associated with compliance.
The cost of compliance with GDPR is only high if you want to straddle the line of what is or isn’t acceptable behavior regarding saving user data and monetizing said data. Lawyers are expensive, and the more crooked you are, the more expensive they get. If, on the other hand, you don’t want to save any data on your users more than you obviously need (in order to do what your users explicitly ask for), then the cost is zero – you are already compliant.
You can send them the json for their user page and a copy of your user data policies. This process can easily be automated with an url. This doesn't cost more to do than any other form of customer support.
> In ALL of any of these 'fine-ings' can we have a document of where the fines were applied and what they accomplished?
Usually, this is impossible, because fines are tossed into a large pool of fungible money which is periodically allocated, but the allocation isn’t done per individual fine.
Of course, the budget which applies to the fund involved is usually public, so insofar as it is approximately and imprecisely (in relation to a specific fine) possible, it is already done routinely.
This money should be fed back into the regulatory system to provide fund for expanding audits of these companies which are clearly out of control. Corporations are basically entities without morals. They only care about the legality of situations and interpretations thereof that their lawyers think they can get away with so as much oversight as possible would be great.
This sets up the worst incentives. Regulators would get paid by the fines they extract, so it would be in their benefit to chase any lawsuit against FAANGs, no matter how tenuous, while letting the 99.99% of other companies run amok because they wouldn't result in the billion dollar paydays.
What we have right now is only half way working why not give it ample funds to fix it? We have judges to decide if a government dept is overstepping its bounds. To always say "bureaucracy is bad, always" is not a very good tautology.
This is just dumb. Would you prefer if executives were sent to prison? These fines are beneficial in the way that business might think twice before fucking over people.
> Would you prefer if executives were sent to prison
Actually that'd be great for serious transgressions. They're at the helm, they make decisions, they reap the rewards, why shouldn't they also be punished when the company fucks up seriously?
Anti-trust isn't a crime. And there are reasons for that other than what cynicism suggests. It is far more difficult to pin down the definition, for example, than it is even for typical white-collar crimes (fraud etc.). And it's morally dubious to punish someone in unpredictable ways. (the (civil(!) anti-trust fines don't create new harm, but are intended to fix a situation, which makes them more acceptable. As an analogy: when someone damages your car and has to pay for repairs, that payment is zero-sum for society. if you hit him in the head, that's a net-negative because you (shouldn't/don't) derive as much benefit from it as they are harmed)
Then, practically speaking, the groups involved are simply too large to pin outcomes on individuals, and we don't do guilt-by-association. The timescales are also wrong, because the people responsible will often have moved on long ago. And the people usually do not participate in the spoils anywhere close to linearly with their involvement (which is a good thing because it prevents most corporate malfeasance: you aren't going expose yourself to moral and criminal guilt at a 9-5 job).
Also,, the standard-of-proof that is required is higher ("beyond reasonable doubt", i. e. 95%) than it is in civil cases ("preponderance of evidence", i. e. 50%). This is an outcrop of that moral-guilt vs responsibility thing from above, and also from the fact that in civil court it's often arbitrary what side of the courtroom you end up on.
I'm not talking about anti-trust per se, even though i think egregious cases still deserve serious punishment.
I mean shitshows like Boeing, Equifax and similar. Where the company showed blatant disregard for safety and security, and it was really not a single person making a mistake, but big parts of the entity being rotten to the core. For such things, the executives should face consequences in the form of a combination of: go to prison for some time, face heavy fines against their personal wealth ( ideally proportional), and have bans on leading any commercial for some time afterwards.
The incentives are all wrong for everything below fraud ( Enron level). Boeing got away with literally manslaughter through criminal negligence, and what consequences where there? The CEO got a golden parachute, and a chief pilot got thrown under the bus. That will make them learn their lesson, right?
>Thomas Vinje, a partner at law firm Clifford Chance and who advises several Google rivals, said Vestager should expand her investigation into other areas.
>"Today's judgment gives the European Commission the ammunition it needs to tighten the screws on Google in other areas where it is throwing its weight around, like in online advertising, app stores and video streaming," he said.
Great idea. Search isn't the only area Google has done bad things. And Google isn't the only big tech company which has done bad things.
Plenty of people don't understand the concept of fining corporations, which is to punish them and get them to correct their ways, not to destroy them financially to the point where they end up firing people, which will now be out of work, which is a pretty big problem.
Fining is because you can't put a corporation in jail. It is basically an alternative meant to speak the language of profit/loss that corporations live and die by.
So in this case if you don't make it so that the bad behavior is "unprofitable", then there is really no incentive to change as profitable business practices will not be discontinued and fines just become part of the operating costs.
but this fine is exactly based on making _this_ bad behaviour unprofitable, the amount is proportional to the estimate of the advantage that google got from its base behaviour.
That is for this instance where they were caught and it took a huge amount of resources, willpower, and luck for that to be followed through on to get to the fine.
Basically in this case it was breakeven minus lawyer fees if they get caught which only happens X% of the time.
That is why there are usually punitive premiums so that the business calculus never makes sense as the cost of doing it x risk of being caught is always a negative compared to potential profit.
TLDR: Fine should be 2-10x times benefit gained or higher to prevent even thinking about trying to get away with it.
Again, the calculation is not public (or: I didn't find it), and I have no idea what the revenue from Google Shopping in the affected countries in the given years were, Google Shopping is not AdSense or AdWords so it's not going to be huge.
But the method is known: the starting point of the fine is sales (revenue, not profit), and is up to 30%. Since this went on for many years in multiple countries, we can imagine it will be on the higher side.
This is also increased by the duration of the infringement, with a multiplier calculated on the basis of the days of participation in the infringement.
If we expect Google Shopping to run with a 4% profit margin on sales, a fine >30% is well within 2x-10x of the benefits gained.
But: your worry is "they get caught only X% of the time". This is _also_ considered in the fine guidelines, because the fine will be increased with each subsequent violation by the same entity.
Every time you get caught, you will be punished worse for all subsequent violations, so each fine changes the loss/gains calculation for all your future anticompetitive behaviour.
While it’s not clear to me if the fine accounts for Google’s total revenue from Google Shopping while the infringement occurred it at least is based on a percentage of revenue which increases with each reoccurrence.
According to [1] “the starting point for setting the fine will take into account a percentage of the value of sales to which the infringement relates, multiplied by the number of years of participation in the infringement. Under the fines Guidelines in force since 1998, the starting point of the fine is based on a lump sum, depending on the degree of gravity of the infringement, to which a 10% increase is added per year of infringement.” and “The Commission's fine of €2 424 495 000 takes account of the duration and gravity of the infringement. In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from its comparison shopping service in the 13 EEA countries concerned.”[2]
The new breathing room created by removing market-distorting monopolists would allow the local tech scene to flourish. Not sure why that would be a bad thing?
Problem is, Google never shut down competing sites or did anything to block them in any way. In fact they funded platforms that could be used to access them.
That's the difficulty with this sort of ruling. What, exactly, does the EU think Google did wrong here? Putting new stuff into search results? That should not be illegal and no such law exists. Reality is the EU will be perceived as both financially robbing America's tech industry and blaming it for its own failures to develop competitive services, regardless of what spin "EU citizens" try to put on this. The perception is inevitable when the supposed crime is so difficult to understand.
I've been reading them continuously for years. The EU's position on shopping sites has never made any kind of sense to me and came across strongly as a pretext. In particular, if I recall correctly, the sites that complained to the EU and started this whole process turned out to be quasi-front companies of various kinds that had never made a real attempt to compete at all.
But this is really all part of a pattern. The EU's cases and laws against tech are always based on super weak rationales. I'm long since past the point of seeing this as a simple form of extraction-ism, and I'm European and live in Europe.
I wonder why the EU won't sink these huge fines back into the process of keeping the companies in check rather than just disbursing it to random cost centers. They could do even better work if they doubled or tripled their investigators and lawyers. That would really send a chill through those who love to rob us of our privacy.
Making fines fund the people who determine the fine is a really bad incentive structure, you will see a lot more fines for sure but the system would be much more prone to corruption.
Mostly tangential: I find it amusing that I got served 3 different ads for Google Fiber on that reuters page (2 of them were the same ad). Of course this is because I looked at Google Fiber a week ago to see if it was in my neighborhood yet, but it isn't and at this point probably never will be.
Good. Google has been dominating search for a long time. At the very least, it is important to constrain how they can use that advantage. (I would rather see search de-monopolized. Not holding my breath...)
> The Commission's fine of €2 424 495 000 takes account of the duration and gravity of the infringement. In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from its comparison shopping service in the 13 EEA countries concerned.
I mean, I'd agree, but 2.8 Billion is a LOT of money. I'm impressed that the EU is willing to even hammer Google that hard. From what I can tell, Alphabet only ever has ~120 Billion USD on hand at any given point in time.
While the fine seems to be doing better than mere pocket change, the fine must be more costly than the benefit of the anti-competitive behavior in order to be effective.
> The company is aggressively buying back stock, having repurchased a record $12.8 billion in the second quarter, bringing the total so far in 2021 to $24.2 billion.
> The company is on pace to buy back around $50 billion of stock this year. It’s a testament to Alphabet’s earnings power that its cash and equivalents were down less than $1 billion in the first half of the year to $135.9 billion despite the heavy repurchases.
So they "only" have $120 Billion on hand while already spending $25 billion of their cash buying back stock and planning on spending another $25 billion this year.
I totally agree with your sentiment. It's sad that a 2.8 Billion USD fine should be considered a big win against a company, but in a regulatory environment where a 10 million USD fine often makes headlines (and is even more often overturned), 2.8B comes a lot closer to being meaningful than one would expect in our current situation.
> the fine must be more costly than the benefit of the anti-competitive behavior in order to be effective.
That might be up for debate. According to Google Finance [1] Alphabet received income of $18.94B in September! So the fine is 15% of ONE quarter of their income.
I don't think that is sufficient and qualifies to more like a slap on the wrist.
So, is the thought that the net benefit of Google's anti-competitive behavior related to comparison shopping services in Europe alone is greater than 1% of Alphabets total income over a calendar year?
No, otherwise the fine would simply be a cost of doing business, and there would still be a positive ROI for Google on the behavior that got them in trouble. The fine needs to be greater than the revenue generated by anti-competitive behavior.
A truly fair punishment would require identifying when the unlawful behavior started, calculating all profits derived from it, taking it away and only then fining them.
Making unlawful business decisions shouldn't be a calculated power move for them. It should put them in a worse position than they started. Like a chess game that gets rewound all the way back to the last legal move, but it costs them a rook or queen as well for the trouble they caused.
A truly fair punishment would be people going to jail (or the threat of it), like is the case for virtually any other crime. This shit isn't going to stop unless people refuse to do it because of the risk of jail.
Alphabet as a whole yes, but the question I think is how much they made from Google Shopping specifically. If the fine was greater than amount of money they made with what they were getting fined about (multiplied by the chance of getting caught, probably higher for google than most), then they EU would successfully discourage similar rule breaking in the future. While alphabet's total income for the year may be that high, most of that comes from ads and not shopping, and penalizing just the shopping related income makes sense in that light.
The alternative argument is that what you really want a fine to do is penalize law-infringing heavily enough that a companies' shareholders make not getting fined again high priority. In that light, you're primarily concerned about levying fines against a company's profit margin/funds they're using to invest in future growth. In which case, yeah, this fine is far too paltry to concern investors in a vacuum.
I disagree. If you use just the percentage from one line of business, this gives the bigger players ability to become bullies when entering new business segments. Google has hundreds of billions of cash on hand, so they can encroach on any new business they want with below board tactics and the fine is based on only percentage of revenue that comes from that new line of business would under penalize them.
> Alphabet only ever has ~120 Billion USD on hand at any given point in time
To them, 2.8 billion USD is change. It's a tip for the government. Make it something like 70 billion and they might start caring. And if it looks like they aren't caring, fine them again until they do.
If the EU fines Google $70 billion, which would obviously be an intentional assault on the US economy given the extraordinary scale, the only proper response would be for the US Government to attempt to destroy a major EU corporation in measured retaliation. Airbus is worth a bit more than $70 billion, they'd be an ideal and very easy target to sabotage.
Economic war? Why can't the US simply allow the corporations to face the consequences of their actions? They probably aren't even going to jail or anything. They're free to either pay or get out of the country that's imposing the fine. Why does Google get to exploit foreign citizens and violate their rights while under the protection of the US government?
Huge fines are the only thing that will work. Corporations these days are richer than nations and these little 2 billion dollar fines do nothing.
> Why can't the US simply allow the corporations to face the consequences of their actions?
They can and usually do. I don't think you'll see any US government action over this $2.8b fine. If the EU decided to try to fine Google out of existence, the US government would be displeased, as that is a direct attack on US interests (it hurts US GDP, tax revenue, employment rate, and US tech dominance), and can and would take action, whether to prevent the fine from happening, to prevent Google from going out of business, or in retribution to prevent the EU from doing anything similar in the future.
> They're free to either pay or get out of the country that's imposing the fine.
Yes, and the EU isn't dumb enough to fine Google enough that would make them consider pulling out of the EU, as that would do pretty significant damage to the EU economy and the willingness of foreign companies to do business in the EU.
> Why does Google get to exploit foreign citizens and violate their rights while under the protection of the US government?
The US government doesn't really care whether Google exploits foreign citizens or violates their rights, as the US government has no obligations to protect foreign citizens and their rights, and does plenty of exploitation and violation of its own to foreign citizens. As long as Google is a net benefit for US citizens and the US government, the US government has incentives to protect Google from foreign governments. None of this is unique to the US or Google, you could replace any country and major corporation and this all still holds true.
> Huge fines are the only thing that will work.
Huge fines are politically impossible, they can't work at all.
> Corporations these days are richer than nations and these little 2 billion dollar fines do nothing.
I don't think so, on either count. The richest corporations are richer than the poorest nations, but that's been true for a long time. The richest corporations are still an order of magnitude smaller than the richest countries, though. And a $2b fine doesn't do nothing, it may do less than you want, but it's still a lot of money that the corporation no longer has and would rather have not paid.
Google isn't doing evil to warrant $70b fines. I reject your premise.
A $70b fine would justify the excessive targeting of a major EU corporation in response.
If the EU were to pretend that Google deserved an arbitrary $70b fine, then they could just as easily pretend US big tech broadly deserves several hundred billion USD in fines.
It's pretty clear where that kind of insane behavior leads.
Proportionality doesn't work with companies that are disproportionally rich. The purpose of the fine is to get them to stop violating people's rights and it's clear that pitiful 2 billion dollar fines are not going to accomplish that objective.
> It's pretty clear where that kind of insane behavior leads.
It leads to Google no longer being a monopoly as well as being more respectful of people's privacy.
Ok, how much should the EU be allowed to fine Google?
How about $12b, that should be 10% of the money they have on hand as I understand it. I think getting fined 10% of your operating money might make you compliant to the law - or is the problem that Google should never be fined any amount that would cause them to become compliant to the law?
these large coorperations and the nations backing them is nothing new.
Also, it is a strategic intrest of europe to protect airbus, especially considering it is the model in terms of being a multinational, truely european company[1], compared to a national one.
What do you think should be done? What methods are there, besides harsh economic sanctions, to control entities which break regulations and detriment free society? Clearly something needs to happen, something with impact. Pray to the invisible hand?
Do you believe Google benefited over $2.8B from showing its shopping comparison results above those of their competitors in the 13 affected EEA countries?
I doubt it.
The fining rules EC follows are intended to ensure the fines exceed the benefit received.
Absolutely, lol. They've been doing this for 8 years and are the masters (regardless of ethics) at ad revenue. Considering Google's market share has quadrupled (low estimate) since 2014, I have no doubts that google could have profited 350M year over year. When has google ever done anything in good faith or something that wasn't profitable for them long term?
"The Commission concludes that the proportion of the value of sales to be used to establish the basic amount of the fine should be […]%."
If it's not 100%+ percent, Google profited, even if it's a penny. This doc is missing way too much data (table 29) for it to make any real sense.
This isn't a fine for Google generally. This fine is for a specific thing Google did wrong: prioritizing their own shopping results in search. The fine was specifically calculated to be greater than whatever revenue Google made from this behavior.
To follow your analogy, they robbed a bank for a million dollars and got fined 2 million. Then keyboard warriors shouted that they should have been fined 10 million because of unrelated crimes which are still being litigated.
> To follow your analogy, they robbed a bank for a million dollars and got fined 2 million. Then keyboard warriors shouted that they should have been fined 10 million because of unrelated crimes which are still being litigated.
Well, more accurately they robbed a bank for a million dollars and got fined a million dollars.
It seems to me you’re just regurgitating something you’ve heard a million times. Stock price is irrelevant, the EU has ran the numbers on googles profit from their shop searches and determined this fine exceeds that profit.
Which the EU fails to provide in their own document, so whos doing the regurgitation here?
I think the top search results which convert to direct sales over the course of 8 years is worth more. Sorry... We can debate, but the reality is many companies ad spend per year is double this number and Google has quadrupled in value since this started which is in fact relevant.
That's what I'm saying... the EU could probably double or triple these fine levels, easy, before Google decides this isn't worth just factoring into cost-of-business.
Of course, if the laws are structured fairly, such steep fine levels would absolutely cripple domestic software companies that ran afoul of them...
Google would probably keep operating at a loss just to prevent competitors from seizing the market and using that to fuel growth in the rest of the world. Better to take a loss and keep everyone else small.
If they stop doing business in Europe, they lose Android dominance in one of the largest, most advanced markets. It might just be what's needed to break the G/A duopoly, and I'm not sure they want to risk losing that.
Before pulling out, it might be worth it to try to charge for Android, or some freemium model. If half of EU Android users will pay 10 euros a year to get in-car integration and youtube access, it should offset any EU fines.
They will never notice the loss. This is a cost of doing business. Also these fines can be financed and become tax write offs through various loop holes and in the end even be a profit for the business.
Had a project related to Drive, exactly 8 years ago mentioned on my twitter about their aproach on literaly all searches related to their services https://imgur.com/a/iM7XhaB
What's wrong with what they're doing there? Your project was named extremely generically and is spelled like a typo; correct the typo and Google and IBM have cloud services most assuredly more popular than your own, and you still managed to come in first.
[0] https://ec.europa.eu/commission/presscorner/detail/en/IP_17_...