European Commission fines Google €2.95B over abusive ad tech practices

Why forfeit $20B in revenue in exchange for NOT having to pay $3B? I think that's an astute observation by the original commenter.

EDIT: FWIW I think your observation that the EU is threading a needle stands. It's a controversial topic that people are very passionate about.

I am not sure why but otherwise seemingly intelligent people seem to be incapable of internalizing that any cost, expense, or fine levied against any corporate entity will always, with 100% (not any other percentage) be rolled into prices. The minor headache of it lowering returns will also be offset and will not really make a difference to any meaningful degree. Most likely Google, just like other corporations that are exposed to this kind of risk, will have set aside a "war chest" they have been building up over prior years, which further would defray any real impact.

Then of course there is the fact that these fines are rarely ever the actual amount that will be paid in the end, and most of the time it can be distributed over time.

What people should really take away from this is that in the end it really is kind of an extortion racket by the EU, but not of Google, but rather of the advertising companies the end consumers who end up paying from he higher priced ads through product prices, and possibly the general Google customer base.

This would really only be an issue that materially impacted Google if there were some kind of real competition in the space, which there is not really. What the EU could possibly do that would have a notable impact is setting industry standards to, e.g., a universal ad format that is ad broker agnostic, e.g., your app, site, service, etc could just serve up ads from all kinds of places, a kind of free market of ads not dominated by Google.

But even with that, with Google's advancement in AI generated content, they will likely also dominate the ad generation market soon.

The oddest thing is that the EU and Europe in general has all but floundered in many ways regarding the generation of a competitive technology industry. But that's a whole different topic.

Of course, in a market with this degree of concentrated market power, those fines would have to be very very high indeed...

Google applying tariffs to itself in Europe might be something the EC may a) investigate and fine Google for ripping off Europeans, and/or b) approve of; they previously considered a big-tech tax to improve competition in Europe. Google would be doing them a favor, and Trump won't send them a nastygram this time around.

>build the fines into operation costs and bill that to EU customers or maybe all Google customers looking to serve ads in the EU.

That will make Google less competitive and allow more players on the market, breaking their monopoly. Not a bad outcome and probably exactly the point of these fines.

My guess is that exactly this similarity coupled with a pinch of humour, was what caused op to classify it as such.

I doubt that google is a monopoly because they are the most competitive at what they do & thus have the market share. I have been using duckduckgo for honestly 3-4 years ago and I think that I have ublock so I don't see their ads but they are really nothing compared to google's ads and they rarely show even without adblocker (I think).

Duckduckgo is already really really competitive, You might argue that ddg uses bing and isn't independent but brave search is independent and comes really close to google to the point that you wouldn't know the difference.

I don't know the last time I used google but I love ddg's bangs etc.

I am sure that someone else can articulate what I am saying into something more logical as to why a monopoly can still exist even while being less competitive than competition.

And also I am saying that it is as easy as two clicks to change the default browser but it maybe speaks mountains that most people still don't switch from google to duckduckgo.

I sometimes want to recommend librewolf just because it has duckduckgo, ublock and sane defaults (except your web browsing deleted everytime/starting from clean slate (I think) and webgl stuff)

Dude, 2.95 Billion $ is already steep, and I am sure that google used to get small fines when it was small in EU too, but its just that the rate at which google grows is more than the rate at which fines grow but I think that EU can't really make a really large number like suing google for 100 billion dollars. and I think that google already weighs in everything like the fines, the costs associated with exiting (stock price drops etc.) and they would actually just do whatever is more profitable to them of the following three options

A) stay in EU & pay the fines B) leave EU C) Follow EU requests

What is the fine amount which might change things into C) and not A) or B)

Because I think EU wants change not money, I am sure that they have plenty of money and they know that google isn't paying them out of their kindness. EU's people or even google itself isn't following EU laws and its affecting people living in EU. I wonder if someone thinks how much powerless EU might feel in that sense. They already have money, they want change.

However, the consumer effects of a "tax" or surcharge on a foreign service applied to a specific jurisdiction are indistinguishable from a tariff. The only difference is the money doesn't go to the government treasury - in any case, that's not the reason most governments introduce tariffs. If Google were to introduce a Europe surcharge, they'd be ironically in alignment with Brussels.

There is no doubt it puts pressure on the prices and in many cases it may entirely be reflected in the prices but the incentive structure doesn't actually necessitate it.

He's suggesting that the money Google does not make because of this regulation may be rolled into prices. The fact that eating the fees is not sustainable doesn't mean they have to take the margin hit for all associated costs.

Whether or not Google is "losing value" (aka money) or losing "illegal income", which aren't mutually exclusive by the way, has nothing to do with that dynamic. They could, in theory, roll that difference into prices either way.

They cost different things based off the country you are in. I guess you could try to distinguish between why they cost different prices in different countries and in some cases it's largely purchasing power parity, but others it absolutely is operational cost differences, such as cloud services. Uber is a bit more mixed - there are definitely purchasing power differences but there are also different regulatory requirements.

All that is to say you could never really tease it all out perfectly in practice.

At the same time, Google absolutely has a significant stranglehold on the adtech market, which is what this is about, not search engines

There are two types of businesses: those allergic to change, and those unable to stay the same.

If you are at a corporation where you constantly have to be Doing Things which Demonstrate Impact, this sort of judgement or regulatory change is a godsend for hundreds or thousands of middle-managers and engineers.

You have a project with clear goals ("comply with court order/new regulations"), relatively low bars for success (minimal impact on the bottom line), and it's all very clear to upper management that the work you're doing is Important. Heck, you might be able to lean on it for a couple of years to justify your existence, instead of trying to convince people that changing the rating system from a five point scale to a percentage then back to a five point scale was a worthwhile use of a dozen employees worth of headcount.

There may be some industries where change is anathema or the owners' oppositional defiance disorder makes they unwilling to change things just because they're illegal, but there's also plenty of others where people will be gleefully fighting for the opportunity to comply with a court order.

This is a very strongly stated opinion that directly contradicts basic theories like “supply and demand.” Of course, simple Econ 101 models often need to be expanded by more complex ones, to capture actual behavior. I guess given the level of smugness in your comment (“otherwise seemingly intelligent,” ok, lol) you have some pretty solid evidence that you just… decided not to share?

But Google has a monopoly there because it operated at a loss to push others out. Like most American tech companies.

Sure, if the folk at Google that coordinate this hypothetical Euro-fine surcharge entirely in person with no paper trail and are confident there will be no whistleblowers.

No oversight body with subpoena powers needs to "tease out" any information, they'll directly request the pricing formulas, related emails and underlying data for 2015-2025 and cross-check with consumer payments.