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<blockquote data-quote="Abstruser" data-source="post: 10502" data-attributes="member: 260"><p><strong><u>3. Big Tech – EU vs Google (by [USER=980]@Angel[/USER])</u></strong></p><p></p><p><strong>The story:</strong></p><p></p><p>On 20th March 2019, the European Union imposed a fine on Google (totalling $1.7 billion) for allegedly stifling competition in the advertising market by blocking rival online search advertisers from displaying search advertisements for a ten-year period between 2006 to 2016. Google did this by forcing customers of its AdSense business to sign contracts against accepting advertisements from rival search engines through the use of exclusivity clauses. Google also imposed other anti-competitive rules such as requiring publishers/ website owners to accept a minimum number of Google advertisements, and they must receive written permission from Google before making any changes to the display of the advertisements.</p><p></p><p>This fine is one of the three separate antitrust investigations that the EU has launched into Google since 2010 - all of which have led to formal charges. Just to recap, Google was previously fined $5.5billion in July 2018 for allegedly abusing its dominance in the Android-mobile industry (also the biggest fine ever imposed by the EU on any one company for anti-competitive behaviour), and a $2.7 billion in 2017 in relation to allegations of manipulating its online shopping search results.</p><p></p><p><strong>Impact on businesses and law firms:</strong></p><p></p><p><em>(Author’s personal views may be implied)</em></p><p></p><p>Although the EU – Google saga may not seem to have a direct or obvious impact on businesses who were not directly involved, it is still valuable because it exemplifies the potential legal, commercial, and social consequences when suits are filed against the company.It also alerts businesses to the trends of policies and regulations. Knowledge of these trends provides more certainty to businesses and lawyers when making commercial plans/ deals. </p><p></p><p>There are a number of lessons from this EU – Google saga to take note of.</p><p></p><p>First, it is worth noting that despite the fine, Alphabet’s shares (Google’s parent company) nevertheless rose 2% by the end of trading after the fine was announced. The rise added approximately $17 billion to the company’s market value, outpacing both Apple and Microsoft. It is worth considering whether this apparently heavy penalty has any significant impact on the tech giant or not, given that it barely nudged Google’s profits, if not make them better. Admittedly, in response to the fine, Google announced that they would be more committed towards making their practices more transparent. However, one might wonder whether this is solely for the sake of its public perception and reputation.</p><p></p><p>Second, similar implications of anti-competitive behaviour apply here. It starts with Google’s rivals being unable to grow. If so, they cannot compete. As a result, website owners will have very little choice as to who they can sell the advertising spaces on their websites to (given that the small rivals cannot afford them). Website owners will thus be forced to rely on Google, which, in turn, further increases Google’s ability to dominate the industry. The cycle thus repeats.</p><p></p><p>Third, the EU also made clear that it will keep an eye on Google’s other areas. Margrethe Vestager (EU Competition Commissioner) said that the EU will continue to monitor developments, and look into the ‘complaints’ that ‘keep coming’ in. This means that it is possible for a fourth instalment to be added to the EU vs Google saga.</p><p></p><p>Fourth, it is important to note that Google is only obliged to pay the EU because it conducts trade and business in Europe. It is irrelevant that Google itself is not incorporated in the EU. Nor is it relevant that the EU reflects more of an international institution rather than a ‘national government’ when it comes to imposing or legislating law. In cases like these, international laws are involved, and the jurisdiction of the European Court will be established.</p><p></p><p>Finally, on a macro-level comparison, these cases show that the EU regulators are much more robust when it comes to dealing with Big Tech companies when compared to their US counterparts. It is interesting how these US originated Big Tech companies are subjected to more vigorous approaches in the EU, especially when it comes to competition, data protection, and tax issues. It is opined that for the benefit of the end-users (the consumers), the EU’s approach is welcome. Constraining the power of arguably the world’s most powerful industry can help boost economies by increasing competition for more competitive services, innovation, and prices.</p><p></p><p>For an interesting take on why big tech should fear Europe, have a look at <a href="https://www.economist.com/leaders/2019/03/23/why-big-tech-should-fear-europe?cid1=cust/ednew/n/bl/n/2019/03/21n/owned/n/n/nwl/n/n/UK/217410/n" target="_blank">https://www.economist.com/leaders/2019/03/23/why-big-tech-should-fear-europe?cid1=cust/ednew/n/bl/n/2019/03/21n/owned/n/n/nwl/n/n/UK/217410/n</a>.</p></blockquote><p></p>
[QUOTE="Abstruser, post: 10502, member: 260"] [B][U]3. Big Tech – EU vs Google (by [USER=980]@Angel[/USER])[/U][/B] [B]The story:[/B] On 20th March 2019, the European Union imposed a fine on Google (totalling $1.7 billion) for allegedly stifling competition in the advertising market by blocking rival online search advertisers from displaying search advertisements for a ten-year period between 2006 to 2016. Google did this by forcing customers of its AdSense business to sign contracts against accepting advertisements from rival search engines through the use of exclusivity clauses. Google also imposed other anti-competitive rules such as requiring publishers/ website owners to accept a minimum number of Google advertisements, and they must receive written permission from Google before making any changes to the display of the advertisements. This fine is one of the three separate antitrust investigations that the EU has launched into Google since 2010 - all of which have led to formal charges. Just to recap, Google was previously fined $5.5billion in July 2018 for allegedly abusing its dominance in the Android-mobile industry (also the biggest fine ever imposed by the EU on any one company for anti-competitive behaviour), and a $2.7 billion in 2017 in relation to allegations of manipulating its online shopping search results. [B]Impact on businesses and law firms:[/B] [I](Author’s personal views may be implied)[/I] Although the EU – Google saga may not seem to have a direct or obvious impact on businesses who were not directly involved, it is still valuable because it exemplifies the potential legal, commercial, and social consequences when suits are filed against the company.It also alerts businesses to the trends of policies and regulations. Knowledge of these trends provides more certainty to businesses and lawyers when making commercial plans/ deals. There are a number of lessons from this EU – Google saga to take note of. First, it is worth noting that despite the fine, Alphabet’s shares (Google’s parent company) nevertheless rose 2% by the end of trading after the fine was announced. The rise added approximately $17 billion to the company’s market value, outpacing both Apple and Microsoft. It is worth considering whether this apparently heavy penalty has any significant impact on the tech giant or not, given that it barely nudged Google’s profits, if not make them better. Admittedly, in response to the fine, Google announced that they would be more committed towards making their practices more transparent. However, one might wonder whether this is solely for the sake of its public perception and reputation. Second, similar implications of anti-competitive behaviour apply here. It starts with Google’s rivals being unable to grow. If so, they cannot compete. As a result, website owners will have very little choice as to who they can sell the advertising spaces on their websites to (given that the small rivals cannot afford them). Website owners will thus be forced to rely on Google, which, in turn, further increases Google’s ability to dominate the industry. The cycle thus repeats. Third, the EU also made clear that it will keep an eye on Google’s other areas. Margrethe Vestager (EU Competition Commissioner) said that the EU will continue to monitor developments, and look into the ‘complaints’ that ‘keep coming’ in. This means that it is possible for a fourth instalment to be added to the EU vs Google saga. Fourth, it is important to note that Google is only obliged to pay the EU because it conducts trade and business in Europe. It is irrelevant that Google itself is not incorporated in the EU. Nor is it relevant that the EU reflects more of an international institution rather than a ‘national government’ when it comes to imposing or legislating law. In cases like these, international laws are involved, and the jurisdiction of the European Court will be established. Finally, on a macro-level comparison, these cases show that the EU regulators are much more robust when it comes to dealing with Big Tech companies when compared to their US counterparts. It is interesting how these US originated Big Tech companies are subjected to more vigorous approaches in the EU, especially when it comes to competition, data protection, and tax issues. It is opined that for the benefit of the end-users (the consumers), the EU’s approach is welcome. Constraining the power of arguably the world’s most powerful industry can help boost economies by increasing competition for more competitive services, innovation, and prices. For an interesting take on why big tech should fear Europe, have a look at [URL]https://www.economist.com/leaders/2019/03/23/why-big-tech-should-fear-europe?cid1=cust/ednew/n/bl/n/2019/03/21n/owned/n/n/nwl/n/n/UK/217410/n[/URL]. [/QUOTE]
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