Shares in Alphabet (GOOGL) were lower today on fears that the U.S. tech giant will soon be slapped with yet another EU fine.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
According to a Reuters report, the European Commission is already drafting a decision on whether to impose the fine or not.
Vertical Search
Earlier this month the Commission handed Google a €2.95 billion, or $3.45 billion fine for favoring its online display technology services and reinforcing its ad exchange AdX’s central role to the detriment of its rivals and online publishers.
The potential second fine relates to charges brought in March that Google favored its vertical search engines such as Google Shopping, Google Flights and Google Hotels over rivals.
It is not clear how much the second fine would be.
What is clear though is that the EU is sharpening the teeth of its Digital Markets Act, which sets out a list of dos and don’ts for tech giants. The rules aim to rein in the power of large companies, giving rivals room to compete and users more choice. Violations can cost companies as much as 10% of their annual global sales.
It is why legal and regulatory decisions are such a key risk for tech companies like Google and its investors – see above.
Customer Benefits
The world’s most popular search engine has reportedly made several proposals in a bid to address concerns and stave off a second fine but has failed to quell criticism from comparison shopping sites, airlines, hotels and retailers.
However, Google could still avert a fine if it comes up with an improved proposal.
In response, Google repeated comments made by its senior director for competition, Oliver Bethell, earlier this year.
“While we have invited feedback throughout this process, we now need to bring this debate to an end without the interests of a few being prioritised over the millions of people and businesses in Europe who benefit from Search,” he had said.
That sentiment was also recently aired by fellow U.S. tech giant Apple (AAPL), which blamed “Brussels bureaucrats” for denying customers its innovative technology.
Apple said EU regulators were unfairly challenging its closed ecosystem and preventing Europeans from fully enjoying the “magical, innovative experience” which makes the company unique.
The EU slapped a $586 million fine on Apple in April accusing it of anti-competitive behavior on its App Store.
What are the Best Tech Stocks to Buy Now?
We have rounded up the best tech stocks to buy using our TipRanks comparison tool.
