EU’s $2.7B fine of Google could be just the start

SAN FRANCISCO — Google’s parent company Alphabet can easily afford the $2.7 billion write-down it’s taking to cover a big antitrust fine in Europe. But it might find it harder to shrug off the rest of the European regulatory assault that’s headed itsway.

In June, a European Commission ruling slapped down Google for abusing its marketdominancein search by unfairly directing visitors to its comparison shopping service, Google Shopping, to the detriment of its rivals. The regulators not only imposed a huge fine, they also insisted that Google change the way it operates in Europe.

Alphabet is still mulling an appeal of that ruling, which could take years to get through the European Court of Justice. And that case is only the first of several such investigations that have embroiled Google across the Atlantic, a situation that raises uncertainty about its ability to operate freely on the forward.

After a seven-year antitrust probe, the European Commission concluded that Google stifles the ability of rivals like Yelp to compete. That’s a different standard than in the U.S., where regulators tend to step in only when consumer prices go up due to monopolistic power.

Europe’s top antitrust regulator, Margrethe Vestager, said Google “denied other companies the chance to compete on the merits.”

In two other cases, the commission charges Google with allegedly forcing its Android smartphone partners to favor Google’s apps and limiting the way its ad-partnerwebsites can display search ads fromGoogle rivals.

An Alphabet spokeswoman said Monday the company had nothing to say on the matter beyond its blog response to the fine last month, in which it painted itself as an underdog in product search compared to Amazon.

It’s unclear how constraints on its behavior could affect it, but 33 percent of Alphabet’s revenue — roughly $8.5 billion in the continent going latest quarter — came from the region it calls Europe, the Middle East and Africa.

Beyondthe fine, Alphabet faces a penalty of up to 5 percent of its average daily turnover if it doesn’t give equal treatment to rival comparison shopping services in Europe by late September. It’s up to Google to figure out howto do so.

“These things tend to hobble a company’s behavior even if there isn’t a decision,” says Jonathan Taplin, a former professor at University of Southern California and author of “Move Fast andBreak Things: How Google, Facebook and Amazon Have Cornered Culture and Undermined Democracy.” “I don’t think it’s the end, I think it’s the beginning.”

But observers believe Google won’t be unduly hurt by Europe’s decision.

New technologies — like voice search — could make shopping listings mostly irrelevant, arguesMartinUtreras, vice president of forecasting at eMarketer. “It’s not like they have complete control of the market in any case.” And companies still fond of the search giant will still likelyspendmoneywith it, no matter how results change, Ballard adds.