Google faces deadline as clock ticks towards new EU fines

2017-08-29 07:00 - Aoife White, Bloomberg News
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Google. (Duncan Alfreds, Fin24)

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Brussels - Google faces a Tuesday deadline to tell the European Union how it plans to comply with an order to stop discriminating against rival shopping search services under threat of new fines that would add to a record €2.4bn (R37.6bn) penalty.

The EU gave the Alphabet unit 60 days to propose how it would "stop its illegal content" and 90 days to make changes to how the company displays shopping search results when users start seeking a product. Those changes need to be put in place by September 28 to stave off a risk that the EU could fine the company 5% of daily revenue for each day it fails to comply.

"The obligation to comply is fully Google’s responsibility," the European Commission said in an emailed statement, without elaborating on what the company must do to comply. Google declined to comment.

The onus is on Google to find a solution that satisfies regulators, who’ve learned from past battles with Microsoft and Intel. Microsoft’s failure to obey a 2004 antitrust order and charge reasonable fees for software licenses saw it fined €899m four years later. Microsoft argued that its prices were fair and it shouldn’t be compelled to give away patented innovation.

Intel’s lawyer said in 2009 that he was "mystified" on what regulators wanted the company to do to comply with an order to halt anti-competitive rebates for chip sales to computer makers. Intel may finally receive clarity when the EU’s top court rules on its legal challenge to a €1.06bn fine on September 6.

The EU now has a month to check if Google’s planned changes will fit the bill. Regulators are also expected to levy fines in separate investigations into Google’s Android mobile-phone software - possibly later this year - and the AdSense advertising service. Margrethe Vestager, the EU’s antitrust chief, has also threatened further probes on travel or map services.

Regulators sought technical help in June to evaluate how Google complies with the order, setting a budget of up to €10m to pay for experts in search engine optimization and search engine marketing.

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