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Google Wins Battle Against €1.5 Billion EU Fine for Ads Abuse

Google Wins Battle Against €1.5 Billion EU Fine for Ads Abuse

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Google has got triumph in contested a €1.5 billion fine levied by the European Union (EU). It was because of engaging in anti-competitive conduct concerning online advertising. It marked a noteworthy judicial triumph. The 2019 fine was partially overturned by the General Court of the EU in Luxembourg and it sided with the tech giant. The penalty was first levied to prevent competitors like Microsoft and Yahoo from running advertisements on websites owned by third parties.

What Happened

Google Wins Battle Against €1.5 Billion EU Fine for Ads Abuse

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The European Commission concluded after looking into Google’s AdSense program that the company had exploited its dominance in the online ad brokerage market. There is evidence indicating that a period of time occurred between 2006 and 2016. It happened when Google’s contracts prevented rival search ads from showing up on websites which utilized Google’s search engine, giving the company an unfair competitive advantage.

But the Commission’s inquiry contained flaws, according to the court, especially in how it determined how long and how serious the violations were.

EU Commission Errors

The Commission’s conclusions were largely confirmed by the court, but it found errors in the assessment of the extent of the purported violations. Judges determined that the Commission had not provided sufficient evidence to establish that Google’s actions constituted a persistent and singular violation of EU antitrust laws. This ruling allows for more appeals and this could lead to the case being heard by the EU’s top court renowned as the Court of Justice.

Google's Reaction

Google said it was pleased with the court’s judgment, finding that it supported its stance and verified the errors in the initial probe. The business argued that, even before to the Commission’s decision, it had already amended its contracts in 2016 to remove the problematic language.

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Ramifications for Large Technology

With its recent setback over a €2.4 billion fine for favouring its own services in search results, Google’s victory comes at a critical juncture. The case represents a turning point in the EU’s protracted attempts, led by antitrust chief Margrethe Vestager, to limit Big Tech’s dominance. Despite this win, Google’s ad technology division is still under regulatory examination in the US and the EU.

Google Fails to Overturn €2.4 Billion EU Antitrust Fine in Court

Google Fails to Overturn €2.4 Billion EU Antitrust Fine in Court

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Google lost its legal battle in opposition to a €2.4 billion antitrust sentence levied by the European Union, marking a significant win for European regulators. The fine, which was imposed in 2017 for the company’s deceptive promotion of its own shopping service above rivals’, was maintained by the EU’s highest court.

Verified Discriminatory Practices

Google Fails to Overturn €2.4 Billion EU Antitrust Fine in Court

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Due to Google’s practice of giving preference to its own retail comparison results in search rankings, the European Court of Justice concluded that the company’s actions were discriminatory. Because it hampered competitors and lessened competition in a market that was already fragile, this activity was found to be illegal under EU competition law. There is no right of appeal for this final decision.

Google was first penalised for using search result manipulation to push its own Google Shopping service to the top of the results while hiding other services in less noticeable spots. This marked a change in the way big tech companies are controlled, as it was the first of several antitrust actions brought against the tech behemoth in Europe.

Greater Consequences for Big Technology

Additionally, this decision opens the door for more extensive enforcement under the EU’s Digital Markets Act (DMA), which went into force in 2023. The DMA forbids self-preferencing on its platforms and targets digital businesses that are regarded as “gatekeepers.” Although Google changed its business practices in 2017 to comply with the original order, it is still being investigated for possible DMA violations involving its search and app stores.

In a reaction, Agustín Reyna, Director General of consumer group BEUC, said he welcomes the decision, calling it "crucially important for Europe’s consumers."

"The Court has confirmed that Google cannot unfairly deny European consumers access to full and unbiased online information about where to get the best deals," Reyna said.

Tech lobby organisation CCIA Europe said in a statement “It is essential that companies in Europe know when competition law will force them to share their technology with their rivals. These companies need legal certainty in advance, they shouldn't be punished after the fact for competing successfully.”

euronews.com

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Google's Reaction

Google voiced its dissatisfaction with the court’s ruling. According to a corporate representative, the company implemented noteworthy modifications after the initial 2017 verdict, resulting in billions of clicks for more than 800 comparison shopping platforms. Rivals counter that these changes haven’t sufficiently levelled the playing field in spite of this.

This result strengthens the European Union’s regulatory strategy and gives rise to additional action against major tech corporations.

 
UK Wraps Up Google, Apple Investigations as New Digital Rules Regime

UK Wraps Up Google, Apple Investigations as New Digital Rules Regime

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The United Kingdom’s Competition and Markets Authority (CMA) has announced the closure of its ongoing investigations into Google’s Play Store and Apple’s App Store, citing the upcoming implementation of the new Digital Markets, Competition and Consumers Act (DMCCA) as the reason. The CMA had previously extended its timeline for reviewing the practices of both tech giants, particularly concerning the distribution of apps on their respective platforms. This move signals a shift in the regulator’s approach, as it prepares to wield broader powers under the new digital markets regime.

Initial Concerns Over App Store Billing Practices

UK Wraps Up Google, Apple Investigations as New Digital Rules Regime

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The CMA’s investigations initially centered on the billing systems mandated by Google and Apple for in-app purchases on their platforms. App developers were required to use Google Play’s or Apple’s own billing systems, which the CMA believed limited the developers’ choice of payment solutions and hampered their ability to interact directly with customers. The regulator was particularly concerned that these practices stifled competition by making it difficult for developers to offer alternative payment options, potentially leading to higher costs for consumers and less innovation in the app market.

In response to the CMA’s concerns, Google proposed several commitments aimed at addressing the issue. These proposals included Developer-only Billing (DOB) and User Choice Billing (UCB), which would have allowed app developers to use alternative payment methods instead of being restricted to Google Play’s billing system. However, after consulting with app developers and reviewing the evidence, the CMA concluded that Google’s proposals were insufficient to resolve the competition concerns effectively.

CMA’s Strategic Shift in Light of the DMCCA

With the passing of the DMCCA in May, the CMA reassessed its ongoing investigations into Google and Apple’s app store practices. The agency decided to close these cases, recognizing that the new pro-competition digital markets regime would provide more comprehensive tools to address the concerns identified in its earlier probes.

Will Hayter, Executive Director for Digital Markets at the CMA, emphasized the importance of the new legislation, stating, “Once the new pro-competition digital markets regime comes into force, we’ll be able to consider applying those new powers to concerns we have already identified through our existing work.” He also highlighted that if Google or Apple are designated as having “strategic market status” in connection with any digital activities, the CMA will have the authority to examine these issues more holistically and potentially implement necessary interventions.

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Implications for the Future

The CMA’s decision to close the cases reflects a broader anticipation of the enhanced regulatory framework under the DMCCA. This legislation will likely empower the CMA to tackle competition concerns more effectively, potentially leading to significant changes in how digital markets operate in the UK. The outcome of these investigations and any future interventions will be closely watched by industry stakeholders, as they may set new precedents for the regulation of dominant tech companies.

Google-Parent Alphabet’s Partnership with AI Firm Anthropic Under Investigation in the UK

Google-Parent Alphabet’s Partnership with AI Firm Anthropic Under Investigation in the UK

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Britain’s Competition and Markets Authority (CMA) is scrutinising Google-parent Alphabet’s partnership with artificial intelligence (AI) startup Anthropic to assess its impact on competition, the regulator announced on Tuesday. This investigation highlights growing global concerns among antitrust regulators about the increasing influence of major tech companies in the burgeoning AI sector.

Google-Parent Alphabet’s Partnership with AI Firm Anthropic Under Investigation in the UK

Image Source: cnbc.com

The partnership between Alphabet and Anthropic comes under the spotlight more than 18 months after Microsoft-backed OpenAI triggered an AI boom with the release of ChatGPT. The CMA’s probe aligns with similar inquiries into other significant deals between tech giants and smaller AI firms. Notable partnerships under review include Microsoft’s collaborations with OpenAI, Inflection AI, and Mistral AI, alongside Alphabet’s connections to companies like Anthropic and Cohere.

Global Coordination on AI Competition

The examination of Alphabet’s partnership with Anthropic is part of a broader initiative to ensure fair competition in the AI industry. Last week, the CMA, along with antitrust regulators from the United States and the European Union, issued a joint statement pledging to work together to maintain competitive markets in AI.

Anthropic, co-founded by former OpenAI executives Dario and Daniela Amodei, has been a significant player in the AI landscape with its Claude AI models competing against OpenAI’s GPT series. Last year, Anthropic announced securing $500 million from Alphabet, with a promise of an additional $1.5 billion in the future. The startup also utilizes Google Cloud services as part of its operations.

The CMA is currently seeking public and industry feedback on whether the Alphabet-Anthropic partnership could potentially lessen competition in the UK market. Interested parties have until August 13 to submit their comments. Based on this input, the CMA will decide whether to launch a formal investigation into the partnership.

Responses from Alphabet and Anthropic

In response to the CMA’s inquiry, a spokesperson for Anthropic expressed the company’s willingness to cooperate fully, emphasizing their independence. “We are an independent company and none of our strategic partnerships or investor relationships diminish the independence of our corporate governance or our freedom to partner with others,” the spokesperson stated.

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Similarly, Google reiterated its commitment to fostering an open and innovative AI ecosystem. “Anthropic is free to use multiple cloud providers and does, and we don’t demand exclusive tech rights,” a Google spokesperson said.

As antitrust regulators continue to scrutinize the alliances between major tech firms and AI startups, the outcome of the CMA’s investigation into Alphabet and Anthropic will be closely watched. The decision could set a precedent for how similar partnerships are regulated in the future, potentially reshaping the competitive dynamics of the AI industry.

Israeli Cybersecurity Firm Wiz Ends $23 Billion Acquisition Talks with Google

Israeli Cybersecurity Firm Wiz Ends $23 Billion Acquisition Talks with Google

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Israeli cybersecurity startup Wiz has officially ended negotiations with Google parent Alphabet regarding a proposed $23 billion acquisition, a move that would have marked the largest purchase ever by the U.S. tech giant. The cessation of talks was detailed in a memo from Wiz CEO Assaf Rappaport, which was reviewed by CNN. In the memo, Rappaport expressed gratitude for the interest shown by Alphabet but reiterated the company’s commitment to its independent growth strategy.

Israeli Cybersecurity Firm Wiz Ends $23 Billion Acquisition Talks with Google

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“I know the last week has been intense, with the buzz about a potential acquisition. While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” Rappaport wrote. The CEO highlighted that the company’s immediate focus will now shift towards an initial public offering (IPO) and achieving an ambitious goal of generating $1 billion in annual revenue.

Shift in Focus Towards IPO and Revenue Growth

The discussions with Google initially began after Wiz successfully raised $1 billion from venture capital investors earlier this year, which valued the company at $12 billion. This significant funding round was a testament to Wiz’s growing influence and the effectiveness of its cloud-based cybersecurity solutions, designed to help organizations identify and mitigate critical risks on cloud platforms.

The decision to terminate the acquisition talks represents a strategic pivot for Wiz. “We believe our best path forward is to build on the strong foundation we have established and continue to innovate in the cybersecurity space,” Rappaport stated. By aiming for an IPO, Wiz is positioning itself to expand its market presence and secure the financial resources needed for sustained growth.

Impact on Google and Alphabet’s M&A Strategy

The termination of the deal is a notable setback for Alphabet, which has been aggressively investing in its cloud infrastructure and expanding its client base. Alphabet’s cloud business generated over $33 billion in revenue last year, and acquiring Wiz was seen as a strategic move to bolster its cybersecurity capabilities, particularly in the cloud sector.

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This development follows another recent disappointment for Alphabet in its mergers and acquisitions (M&A) efforts, after the company reportedly decided not to pursue a deal with online marketing software company HubSpot. Despite these setbacks, Alphabet continues to focus on enhancing its cloud services portfolio. In March 2022, the tech giant acquired cybersecurity firm Mandiant for $5.4 billion, underscoring its ongoing commitment to strengthening its position in the cybersecurity market.

Wiz’s choice to remain independent and focus on organic growth underscores the dynamic and competitive nature of the tech industry, where strategic decisions can significantly impact market trajectories and corporate fortunes.

Alphabet in Talks to Buy Wizz in $23 Billion Cyber Deal

Alphabet in Talks to Buy Wizz in $23 Billion Cyber Deal

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Google’s parent company, Alphabet Inc., is actively negotiating the acquisition of cybersecurity startup Wiz Inc., potentially marking its largest acquisition yet in the tech industry. Sources familiar with the matter have indicated that the deal could reach up to $23 billion, although discussions remain ongoing and may not result in a final agreement.

Strategic Move Amid Increasing Competition

Alphabet in Talks to Buy Wizz in $23 Billion Cyber Deal

Image Source: gadinsider.com

Alphabet’s interest in Wiz underscores its strategic focus on bolstering its cybersecurity capabilities amidst intensifying competition in the cloud market dominated by rivals like Microsoft and Amazon. Wiz, founded in 2020 and valued at $12 billion during its recent funding round, specializes in cloud security by scanning data stored on platforms such as Amazon Web Services and Microsoft Azure for potential vulnerabilities.

The potential acquisition aligns with Alphabet’s broader strategy to expand its cloud customer business, offering advanced artificial intelligence tools and enhancing its competitive stance against industry leaders. Despite historically trailing Microsoft and Amazon in cloud computing market share, Alphabet’s cloud unit has shown profitability in recent quarters, reflecting its efforts to capture a larger share of the market.

Regulatory Scrutiny and Market Dynamics

However, Alphabet’s pursuit of Wiz could face regulatory scrutiny, given the company’s existing antitrust challenges and the scale of the proposed acquisition. The tech giant is already under investigation for alleged anticompetitive practices in its search and digital advertising businesses, further complicating potential deals of this magnitude.

The talks with Wiz come on the heels of Alphabet’s decision to abandon its pursuit of HubSpot Inc., indicating a dynamic strategy to pivot towards opportunities in cybersecurity and cloud computing. Market reactions to the news have been positive, with Alphabet’s stock showing a modest increase following reports of the potential acquisition.

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As Alphabet navigates negotiations with Wiz, the outcome could significantly reshape the landscape of cybersecurity and cloud computing markets. For Alphabet, the acquisition represents a pivotal opportunity to enhance its technological capabilities and competitive positioning against industry rivals. However, the ultimate success of the deal hinges on regulatory approvals and the alignment of strategic objectives between the two companies.

Stay tuned as developments unfold, shaping the future direction of Alphabet’s expansion in cybersecurity and cloud services.