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Still pocket change for a multibillion company like Google. I hope EU will keep hammering them with fines until they change, or until they start noticing the l

by mdrzn 5y ago

Still pocket change for a multibillion company like Google. I hope EU will keep hammering them with fines until they change, or until they start noticing the loss.

shadowgovt 5y ago
Or until they decide it's not worth the cost to do business in Europe. As of 2018, they were pulling about 32.2 billion euros in revenue in the European market, so there's quite a ways to go.
- nixass 5y ago
  Of course they will decide to leave the market twice as big (population wise) as US' one
  - nyxaiur 5y ago
    They didn't even follow through with their threat to leave the Australian market or the UK or France or Belgium or Germany. I don't even know whom they didn't threaten.
  - shadowgovt 5y ago
    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...
    - eropple 5y ago
      > Of course, if the laws are structured fairly, such steep fine levels would absolutely cripple domestic software companies that ran afoul of them... Scaling to revenue isn't unfair. It's how you properly scare multinationals into compliance.
    - wongarsu 5y ago
      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.
- no_time 5y ago
  >Or until they decide it's not worth the cost to do business in Europe. One can only dream. There is no efficent solution to rangebanning google ips on mobile devices that i'm aware of.
- tremon 5y ago
  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.
  - orteam 5y ago
    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.
  - DaiPlusPlus 5y ago
    And what non-Android, non-Apple platform would users switch to?
    - Jensson 5y ago
      Voids get filled extremely fast when they appear.
Medox 5y ago
multitrillion*
badRNG 5y ago
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.
- jjulius 5y ago
  >... Alphabet only ever has ~120 Billion USD on hand at any given point in time. "Only".
  - badRNG 5y ago
    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.
  - mikeyouse 5y ago
    And with insanely aggressive share repurchases: > 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. https://www.barrons.com/articles/alphabets-voting-shares-are-now-in-the-buyback-program-the-stock-is-surging-51627482792 https://www.barrons.com/articles/alphabets-voting-shares-are...
    - remram 5y ago
      Looks like the fine is an order of magnitude too low too hurt, at least.
CapitalistCartr 5y ago
When Google swallows a company, a valuation of only $2.8 billion is a small acquisition.
bastardoperator 5y ago
It's like robbing a bank for a million dollars and the penalty for doing it is paying back 100K. Why would I ever stop robbing banks?
- k8sToGo 5y ago
  Because the penalty doesn't stop at 100k for repeating offenses?
  - bastardoperator 5y ago
    Until it stops being profitable, it really doesn't matter what you fine them. Stock price is up 5.82% over the last 30 days...
    - edgyquant 5y ago
      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.
      - bastardoperator 5y ago
        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.
- AnssiH 5y ago
  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. There are more details about the calculation of the fines in the original EC decision of the (AT.39740), section 14 Fines starting from page 207: https://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf https://ec.europa.eu/competition/antitrust/cases/dec_docs/39...
xwdv 5y ago
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.
- dahfizz 5y ago
  Legal fees are generally paid in pre-tax money, that's true. How does that end up as a profit?
  - xwdv 5y ago
    Through some extremely creative accounting.

by mdrzn 5y ago

Still pocket change for a multibillion company like Google. I hope EU will keep hammering them with fines until they change, or until they start noticing the loss.

shadowgovt 5y ago

Or until they decide it's not worth the cost to do business in Europe. As of 2018, they were pulling about 32.2 billion euros in revenue in the European market, so there's quite a ways to go.

nixass 5y ago
Of course they will decide to leave the market twice as big (population wise) as US' one
- nyxaiur 5y ago
  They didn't even follow through with their threat to leave the Australian market or the UK or France or Belgium or Germany. I don't even know whom they didn't threaten.
- shadowgovt 5y ago
  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...
  - eropple 5y ago
    > Of course, if the laws are structured fairly, such steep fine levels would absolutely cripple domestic software companies that ran afoul of them... Scaling to revenue isn't unfair. It's how you properly scare multinationals into compliance.
  - wongarsu 5y ago
    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.
no_time 5y ago
>Or until they decide it's not worth the cost to do business in Europe. One can only dream. There is no efficent solution to rangebanning google ips on mobile devices that i'm aware of.
tremon 5y ago
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.
- orteam 5y ago
  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.
- DaiPlusPlus 5y ago
  And what non-Android, non-Apple platform would users switch to?
  - Jensson 5y ago
    Voids get filled extremely fast when they appear.

Medox 5y ago

multitrillion*

badRNG 5y ago

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.

jjulius 5y ago
>... Alphabet only ever has ~120 Billion USD on hand at any given point in time. "Only".
- badRNG 5y ago
  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.
- mikeyouse 5y ago
  And with insanely aggressive share repurchases: > 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. https://www.barrons.com/articles/alphabets-voting-shares-are-now-in-the-buyback-program-the-stock-is-surging-51627482792 https://www.barrons.com/articles/alphabets-voting-shares-are...
  - remram 5y ago
    Looks like the fine is an order of magnitude too low too hurt, at least.

CapitalistCartr 5y ago

When Google swallows a company, a valuation of only $2.8 billion is a small acquisition.

bastardoperator 5y ago

It's like robbing a bank for a million dollars and the penalty for doing it is paying back 100K. Why would I ever stop robbing banks?

k8sToGo 5y ago
Because the penalty doesn't stop at 100k for repeating offenses?
- bastardoperator 5y ago
  Until it stops being profitable, it really doesn't matter what you fine them. Stock price is up 5.82% over the last 30 days...
  - edgyquant 5y ago
    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.
    - bastardoperator 5y ago
      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.
AnssiH 5y ago
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. There are more details about the calculation of the fines in the original EC decision of the (AT.39740), section 14 Fines starting from page 207: https://ec.europa.eu/competition/antitrust/cases/dec_docs/39740/39740_14996_3.pdf https://ec.europa.eu/competition/antitrust/cases/dec_docs/39...

xwdv 5y ago

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.

dahfizz 5y ago
Legal fees are generally paid in pre-tax money, that's true. How does that end up as a profit?
- xwdv 5y ago
  Through some extremely creative accounting.