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

Going to pre-empt the comments that always pop up in these topics saying "Google/Meta/Apple will just leave the EU at this rate": Google still has around $20 billion yearly reasons to remain active in the EU. Talking Europe yearly net profit here, post-fine. No, they're not going to say "screw this fine, you can take your $20 billion per year, we're leaving!". The second that happens, shareholders will have Sundar's access revoked within the hour.

There is a number of countries where Google has to deal with large levels of protectionist barriers (not the EU, these fines aren't that) and they still operate there. Korea is just one example. Because there's still a lot of money to be made. China isn't a counterexample: Google stopped operating search in China because at that point there was not a lot of money to be made for them in search there.

I love that you got one response calling it extortion, and another worrying that it might not have recovered all the money from the abusive practices.

The EU is threading the needle deftly here, I guess.

Im not necessarily saying its extortion. Im saying his observation is why the EU could extort Google for a lot more than $3B. My wording was unclear so I tried editing my original comment but apparently it was removed.

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

Here's a better option that Google will more likely follow; simply build the fines into operation costs and bill that to EU customers or maybe all Google customers looking to serve ads in the EU.

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.