By Winny Sun
Last Wednesday, Google was fined $1.7 billion by the European Commission for unfairly blocking other companies from posting ads on third-party websites that use the Google search engine. According to European regulators, Google required owners of third-party websites to prioritize its own ads over those from competing advertising agencies.
This is the third time in less than two years that Google has been fined by the European Union, with charges totaling €8.2 billion or $9.3 billion. The first two cases involved Google unfairly blocking rival price comparison services from showing up high in Google search results as well as requiring phone manufacturers to preinstall its Chrome browser in the devices. While Brussels has long been a vocal critic of big tech companies, there have been few restrictions in the United States.
There are many reasons why American regulators impose fewer rules on tech companies than its European counterparts. Differing attitudes toward regulation play a role. While Americans tend to be skeptical about excessive governmental oversight, Europeans are generally more comfortable with authorities taking charge. It is also easier to pursue antitrust cases in European countries. The European Commission, for instance, can impose fines without getting approval from national authorities.
Critics argue that the European model stifles creativity and innovation, citing a lack of European tech companies as successful as American tech giants like Google, Facebook, and Amazon. American businessman and Paypal founder Peter Thiel even went as far as to say that the European Union is imposing fines on U.S. companies because it is jealous of their success.
The new penalty will not have a notable impact on Google. The tech giant had already stopped blocking rivals’ ads from showing up on third-party websites back in 2016, and the $9.2 billion fine is not too significant, considering the company makes an annual revenue of $137 billion. In fact, Google’s shares rose by 2% after Wednesday’s fine.
But the EU is not done with Google or the tech industry yet. It is expected to roll out new copyright policies regarding the sharing of unlicensed music and videos on platforms like Google and Facebook. It also plans on blocking extremist content, angering free speech advocates. Back home in the U.S., Senator and presidential candidate Elizabeth Warren has also vowed to break up tech giants. The future looks bleak for tech companies if they cannot prioritize user rights and safety above profits.
“Businesses and consumers, they depend on platforms to get the best out of digitization. Illegal behavior in these cases is a very serious affair, ” European Commissioner for Competition Margrethe Vestager said.