$3.6B fine just start of Google’s problems

LUXEMBOURG It’s not only the European Union that has it out for Google.

Seven large U.S. tech companies had written to the EU’s antitrust watchdog urging it to go ahead with what ended up being a record fine on the world’s most-used search engine for obstructing competition and “stifling innovation.”

“As U.S.-based companies, we wish to go on the record that enforcement action against Google is necessary and appropriate, not provincial,” the companies, including Yelp Inc., Oracle Corp. and Rupert Murdoch’s News Corp., said in a letter to EU Competition Commissioner Margrethe Vestager.

The companies “have watched Google undermine competition in the United States and abroad,” they said in the June 26 letter. “Decisive action is necessary to restore competition and once again open the Internet to innovation and growth.”

The European Commission on Tuesday fined Alphabet Inc.’s Google a record 2.42 billion euros (C$3.6 billion) for skewing results to the detriment of smaller shopping search rivals.

Google was given 90 days to change its behaviour, or face further fines of up to five per cent of its daily revenue. That’s about US$10 million a day, according to Needham & Co. analyst Kerry Rice.

The decision is a further step in the tumultuous seven-year EU probe fuelled by complaints from small shopping websites as well as bigger names, including News Corp., Axel Springer SE and Microsoft Corp.

Google has the right to appeal to the EU’s top courts, and the commission said it plans to monitor Google’s reaction to the order “for a number of years.”

European politicians over the years have called on the EU to sanction Google or even break it up, while U.S. critics claim regulators are targeting successful U.S. firms.

The letter seeks to dispel criticism that the commission is using its powers to deliberately and unfairly target U.S. companies.

In addition to three separate probes into Google, the EU last year slapped Apple Inc. with a record 13 billion-euro ($19.4 billion) tax bill plus interest after the commission accused it of benefiting from selective tax treatment in Ireland. Similar EU decisions may be in store against Amazon.com Inc. and McDonald’s Corp. over their tax affairs in Luxembourg.

On Tuesday, Vestager refuted allegations that her actions were biased against U.S. companies.

“I can find no facts to support any kind of bias,” Vestager said.