Google Execs Hunker Down for Fight With EU

As European Union officials count the days before their annual vacation, Google’s lawyers and lobbyists are hunkering down in Brussels, preparing for what may be a record EU antitrust fine, according to Bloomberg. A penalty in the shopping-search probe could come within weeks and many expect it to exceed a $1.2 billion fine on Intel in 2009.

That would be another show of strength by EU Competition Commissioner Margrethe Vestager who slapped Apple with a 13 billion-euro tax bill in August. Google is a top priority case for her as European politicians and publishers push for action against the company that’s come to dominate online advertising.

The EU has a long tradition of issuing major rulings just before officials quit Brussels for their summer break. Last July saw more than $3 billion in fines for truck makers including Daimler and Volvo. With one eye on the impending decision, some Google officials have been getting ready, moving vacation dates or making sure they are close to the action, other people familiar with the probe said.

Vestager isn’t afraid of big numbers, setting records with the tax bill for Apple, which it’s appealing, and the cartel fine for truck companies. Facebook may have got off lightly with a mere 110 million-euro penalty for not providing correct information in the WhatsApp merger probe. Intel holds the top spot for a monopoly abuse with a fine of 1.06 billion euros. That represented more than 3 percent of Intel’s $37.6 billion in sales in 2008, below the maximum penalty of 10 percent of yearly sales regulators can impose.

As Alphabet pulled in $90 billion in revenue last year, any fine would be capped at $9 billion. But within that limit, the actual size of the fine would be calculated from sales in the market under investigation. Alphabet’s Google division generated $79 billion in ad revenue in 2016. While it doesn’t break out sales for shopping search advertising, ads from search provide most of its revenue. The EU also factors in how many years the illegal conduct lasted. Regulators say the systematic promotion of Google’s own shopping search started in 2008.

A large penalty and an order for Google to change its ways might just be the start. The EU is also examining its AdSense advertising service and its Android mobile phone software. The Android investigation goes to the heart of what Google does in the mobile-phone space, questioning the strict terms Google places on phone makers and app developers to use the software it provides for free. After the decision is made Google can appeal, which could take years. Microsoft only won a 4 percent cut to its fine. Intel has been waiting eight years for a final ruling.