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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

Image Source: telecom.economictimes.indiatimes.com

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.

 
Apple Faces $539M Fine in EU Antitrust Case Sparked by Spotify

Apple Faces $539M Fine in EU Antitrust Case Sparked by Spotify

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The European Union has imposed a massive fine of $539 million on Apple following a complaint filed by Spotify. The complaint accused Apple of anti-competitive practices through its in-app purchase system, often referred to as the “Apple Tax”, which imposes a 30% fee on digital purchases made within apps on iOS devices. The fine marks a significant moment in the ongoing debate over the fairness and openness of digital marketplaces, particularly the App Store, which serves as the sole gateway to software on millions of devices worldwide.

Apple Faces $539M Fine in EU Antitrust Case Sparked by Spotify

Image Source: bloomberg.com

Spotify’s complaint, filed in March 2019, argued that Apple’s policies stifled innovation and limited consumer choice by penalizing competitors of Apple Music, its own streaming service. By imposing the 30% fee, Apple effectively forced competitors to either raise their prices or significantly cut their earnings, with Spotify claiming that the move was intentionally made to harm competitors.

The EU's Investigation

The European Commission’s investigation concluded that Apple’s practices distort competition in the music streaming market, a violation of EU antitrust laws. This decision underlines the EU’s commitment to ensuring fair competition and innovation within its digital single market. This fine is not just a financial penalty, but also a signal to major tech companies about the importance of complying with EU rules designed to protect market competition and consumer choice.

Apple’s App Store policies, particularly the mandatory use of its payment system for in-app purchases, are under scrutiny for creating a controlled environment that limits other companies’ ability to compete effectively. . The case is important because it challenges the mechanisms through which big tech companies maintain their market dominance and control over ecosystems such as app stores.

The impact of this fine goes far beyond the financial impact on Apple. This could prompt a re-evaluation of app store policies and practices, potentially leading to more significant changes in the operation of the digital marketplace. For consumers, this could mean more choices and potentially lower prices as competition is encouraged. For developers, this represents a push for more equitable treatment and the opportunity to compete on more level terms within the app ecosystem.

Apple expressed its disagreement with the EU’s decision and stated plans to appeal the decision. The Company describes its App Store policies as appropriate and necessary to maintain the quality, security and privacy standards expected by users.

Also Read: Apple’s iPhone 16 to Feature Super-Fast Performance Upgrade, Leak Suggests

Conclusion

The European Union’s decision to fine Apple serves as a pivotal moment in the tech industry, potentially setting the stage for further regulatory actions aimed at ensuring fair competition and innovation. This case underscores the growing global scrutiny on the business practices of tech giants and the need for a balanced digital market that serves the interests of both consumers and developers.

Alibaba

Alibaba says it does not expect any material impact from the $2.75 billion antitrust fine.

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China’s biggest business conglomerate, Alibaba Group is not expecting any material impact in business and from merchants, said Daniel Zhang, CEO of the company. Alibaba Group was charged a fine of $2.75 billion for its powerful market dominance in the nation. The company is going through a giant turmoil and disturbance with the Chinese government since last year.

In October 2020, Alibaba Group’s founder Jack Ma openly criticized the Chinese regulatory system. And since then Alibaba Group has been put under strict scrutiny and faced antitrust charges. Alibaba Group has significantly improved the economic system of China through its growing and flourishing business, but the open criticism against the Chinese government is coming with a heavy price.

New Initiatives by Alibaba

Since the company has gone through strict investigations since last year, the regulatory authority will have a strong vigilance. Apart from paying the $2.75 billion antitrust fine, the company is introducing new measures to lower the entry barriers and business costs that are constantly faced by any existing or new merchants on its platform. High cost for new business is an obstacle that needs to be softened to get them a better start and opportunity. Zhang revealed the measures to be taken to lower business costs for merchants in an online conference.

Alibaba
Image Source: techzine.eu

Alibaba’s executives have made a statement that though the company has paid a huge amount of new antitrust fine and that new regulatory measures are to be followed by the company, it believes that the company has overall support from the government (Reuters). Joe Tsai, executive vice-chairman of Alibaba Group said that the government is affirmative of the business model of Alibaba.

The company executives further said that they don’t have any fundamental flaw with their business model as a platform company. The new measures will hopefully bring the turbulence between Alibaba group and the Chinese government into balance. But, it is also a major concern if anyone else criticizes the Chinese regulatory system has to go through the same strict scrutiny.

Shares Bounce

Alibaba’s share has been going down and lagging behind the overall emerging economy for some time in the past. Everbright Sun Hung Kai analyst Kenny Ng has said that now that Alibaba group is paying the penalty fee the uncertainty faced by Alibaba Group in the market will reduce. The antitrust fine along with the regulatory measures that are imposed on the company is expected to bring back Alibaba’s stock price and it will once again regain control in the market.

The antitrust fine that has been enforced on Alibaba Group is one of the highest ever antitrust penalties not only in China but across the globe. Along with the $2.75 billion penalties, the State Administration for Market Regulation (SAMR) has ordered the company to make thorough rectification in order to strengthen internal compliance and protect consumer rights (Reuters). Big conglomerates like Alibaba Group often face criticism both from the government and the public due to establishing a great amount of control in the market.

Another similar example is the Australian government enforcing a law that made Facebook and Google make paid deals with local media companies of Australia. On the bright side, the government is trying to support the local media companies and in the case of Alibaba, consumer rights and internal compliance.

The new measures will likely reduce the revenue growth of Alibaba as a further expansion in the market share will be restricted. Alibaba will also face reduced profit margins in order to upgrade products and services. The company has also constrained the merchants to sell through any other platforms since 2015. This violates China’s anti-monopoly law as the free circulation of goods is hindered.

Exclusivity Issues

Alibaba will be giving the penalty and along with that, it has accepted to ensure compliance and determination. Tsai has said that apart from reviewing the company’s mergers and acquisitions so far the company doesn’t expect any further investigation. He also mentioned that apart from that he doesn’t know of any other anti-monopoly related investigation.