Google’s clash with EU antitrust authorities echoes Microsoft’s regulatory battle for a decade, a legacy that parent company Alphabet must take into account when considering challenging the Commission, lawyers and fund managers said.
After a seven-year investigation of dozens of complaints from rivals, the European Commission hit Google with a record 2.4 billion euro fine ($ 2.73 billion) for favoring its own purchasing service and an order to treat services Rivals in the same way it treats its own Products.
“When I saw this yesterday, it absolutely rang a bell,” said Georg Berrisch, a partner at Baker Botts who advised Microsoft in its EU regulatory dispute, while at another law firm.
The European Commission imposed a fine of 497 million euros on Microsoft in 2004 and ordered it to take measures to boost software competition. He did not comply with this decision and was fined 899 million euros. In all, his battle with the EU in several other investigations cost more than 2.2 billion euros in sanctions.
In an oblique reference to Microsoft, which faced nearly two decades of legal scrutiny for antitrust violations, Alphabet CEO Eric Schmidt said at a 2011 Senate hearing: “We understand it, with the lessons of our corporate predecessors . ”
But Google has a lot to learn, said Stephen Kinsella at law firm Sidley Austin, who advises the Google claimant and UK online shopping comparison site Kelkoo.
“Years ago, Google said they did not make Microsoft’s mistakes, they did all of them and created some of their own, and yesterday’s public statements show they still do not get it,” he said.
Google said on Tuesday it disagreed with the EU’s findings that it had abused its dominant position and was considering an appeal. He said he hoped to continue his argument.
“The real danger for Google is to enter into an extended battle with the Commission over whether what it has done is enough to meet its decision. It can be quite expensive for Google in the end. This is not the end of the story,” he said. Berrisch.
Underlining the task of Google, the Commission published a tender for technical assistance on Wednesday. The five-year contract has a value of 10 million euros and can be renewed.
So far, investors have given Google the benefit of the doubt, with the Alfabet ranking behind Apple as the most valuable in the world with a market capitalization of $ 666 billion. But they are taking note.
“The real concern is whether the Commission will succeed in forcing Google to change its business model, its algorithms in a way that could be detrimental to the business,” said Wesley Lebeau, fund manager of CPR Asset Management, an Amundi company.
“The search engine is still 60 percent of Alphabet’s rating, so it’s a big problem, although the engines for future growth are YouTube and all Alphabet companies – Waymo, NEST, Verily,” he said.
Technology titans have so far benefited from the perception that they bring benefits to society, said Freddie Lait, founder of Latitude Investment Management.
“But there is a small possibility that if the glitter fades and you have more of these terrorist videos … and the fine is a huge fine, it sent a message to consumers that there has been wrong done,” he said. “If the brightness comes off, the claws are out of the regulators and governments to try to get their meat pound from all the big tech companies.”
