Google hit with €1.5B fine from EU over advertising | Hacker News Reader

Google hit with €1.5B fine from EU over advertising

bbc.com

540 pointsokket400 comments

This is not for AdSense on Google.com, this is for third-party sites with a search feature showing search ads to their own customers.

A third-party site who wants to show ads in their own search results could partner with Google to include AdSense ads in their own results. The Google contract originally required exclusivity, and then was changed to require Google ads to be more prominent.

In the context of the market for third-party sites running search ads, the $1.5 billion fine seems extremely high.

On the one hand, it’s not immediately obvious to take a conglomorate’s total worldwide revenue into account to value a fine for a specific market, versus considering only the revenue for that market.

However in this case Google is squeezing out companies like Yahoo and Bing from increasing their own ad inventory in the few ways that are available to them, aside from increasing their own organic search traffic. So this is where the anti-competitive behavior comes in, and perhaps why the fine is so massive.

I can’t imagine keyword search on third-party sites is responsible for a significant share of overall AdSense revenue, I wonder if it’s even a single digit percentage of their overall ad inventory?

Single digit percent of Google's overall ad inventory would be $1bn-$10bn per annum, at current scale. Google's ad business is big. Over 10 years...

One of the first "tricks" you learn on adowrds is to turn off (it's hard to find) "search partners," or at least split it off and quarter your bids. It's on by default and'll take up a surprising amount of your budget, using default settings.

I wouldn't be surprised if it ads up to a meaningful share of the "search ads" market.

Vestager said the fine had been calculated based on Google's online advertising revenue in Europe.

https://www.politico.eu/article/europe-google-margrethe-vest...

Seems like there are ways to avoid tax and ways to "recover" it back.

I happen to believe that the excessive "fines" that the EU has been directing at the technology industry are a brazen plan to extract money from large technology companies without violating international taxation treaties signed with the United States.

If that's the case, they need to start issuing more fines to more companies to really make a dent.

These fines are big, but as a percentage of the tech industry revenue, they're still under 0.1 percent

That's not the relevant comparison. What are the fines compared to net profit in the EU?

As long as the punishment for the crime is less than the crime itself, crime will perpetuate.

If you steal 1.000,00€ from a bank, they don't fine you 1€. No. They send you to jail for years.

Not sure why you're being down-voted... without a punitive component to the fine, (i.e. if it were only damages) then Google would have absolutely zero incentive to even pretend to change their ways. They could just pay a small fine, laugh, and say "See you next year."

EDIT: And now I'm getting down-voted too. Would you nay-sayers care to chime in with more than an e-frown?

The top-level commentator isn't arguing that fines should be capped at the damages, he's arguing that they should be indexed to the damages (say, proportional to them). If I steal $50, the punishment is larger than $50, but it's determined relative to that magnitude, and in particular does is not just picked to be a fraction of my income. A $100,000 fine would be excessive punishment for stealing $50 dollars, and the top-level commentator is wondering whether a €1.5B fine is excessive in light of the fact that the entire market third-party search is much smaller than that.

It is indexed, just not to the damages, but to the revenue of the guilty party.

Other countries in the EU do this as well, even in personal matters. For instance, a speeding ticket is based off a percentage of your annual income. Why? Because if you make $200k a year, a $50 fine isn't a big deal, at all, but if you barely scrape by, $50 could break your budget for the month.

First, the vast majority of the world does not use the day-fine system. But more importantly, it makes no sense to index corporate fines to a firm's revenue because corporations can be split/combined (unlike people). Indexing fines to firm size would lead to market distortions, especially in the case when those fines are a significant fraction of total revenue.

Google isn't a single person. They're already more likely violate some laws and regulations just because they're so big. You can't double dip by treating every small infraction like it's a huge company-wide problem.

> Why? Because if you make $200k a year, a $50 fine isn't a big deal, at all, but if you barely scrape by, $50 could break your budget for the month.

That makes no sense. If you're stealing $50 then a $150 fine is a deterrent even if you're a billionaire, because the expected value if you're caught is -$100, which has nothing at all to do with how much money you have.

And if that caused the billionaire to not care, that's great. If I got $150 every time someone stole $50 from me and that didn't deter them, I'd start researching how to get them to steal more money from me because it's so profitable to me. If they're willing to pay that much more than something costs, at that point you're just selling it to them and deterrence is not desired because the transaction is apparently net positive to both parties.

Moreover, it seems that you're suggesting that someone with $0 income and $0 assets then should have a <=$50 fine because it's all they can afford? That's the thing that really wouldn't serve as a deterrent, in a problematic, net negative consequences sort of way.

Exactly. Why should corporations get off easy when we don't?

Corporate law has lots of grey area, robbing a bank doesn't.

Because we can't close corporations for a rules violation.

I mean we could

Kind of like how we could implement the death penalty for marijuana possession?

We can, we just chose not to.

We chose not to because it’s a bad idea. That’s what I’m getting at here. “Killing” a company for a rules violation is also probably a bad idea.

Why shouldn't we all get off easy (or easier)?

Imagine if the punishment for stealing was to be fined for 10% of the amount you stole. Like, you get to keep 90% of it.

You'd rob a bank and then drop by the police station to drop off their cut just to avoid the hassle of "getting investigated" later.

So obviously the punishment has to be worse than the value of doing it. But not 1:1 either, if you know you'll only catch 50% of robbers, then the fine would have to be something like ${amountStolen}*3 so that the equation makes the Expected return of robbery sharply negative. I.e. if you expect to get caught 50% of the time, and only had to return the money you stole when caught... then robbery would be very profitable. If you had to pay twice what you stole, then the Expected return is actually a wash, and wouldn't necessarily deter potential robbers. However if you have to pay a fine of 3x what you stole and you think you'll get caught 50% of the time then it's a money-losing venture.

This is all ignoring jail time, of course, because no one can send Google to jail... so from the corporations point of view it just comes down to money.

At $1.5B, it's about collecting revenue to fund EU activities. It's far beyond the amount of revenue the infraction generated by order(s?) of magnitude, and was a gray area to boot.

Keeping the taxes as "fines" ensures they can give EU companies favorable treatment. It's the definition of corrupt: "a willingness to act dishonestly in return for money"

In European law, jail times and fines are multiplied by consecutive infringements to be punished. Meaning if you stole three times in a row and get caught after the third, you get sentenced three times the theft sentence.

Because then, like corporations do, we won't correct our behavior, we'll just accept the punishment as an occasional cost.

I believe part of the purpose of corporations is to create an entity that is capable of doing "icky" things that might be unpalatable for a person to do, but need to be done nonetheless. Specific examples of "icky" things include building war weapons, producing/testing drugs that we know will kill some patients, performing tasks which create pollution which will kill people, etc. I want to be clear that I'm not proposing how anything should be, and am definitely not implying we should let corporations run amok. I'm just suggesting I believe we're lenient on the icky behaviors of corporations by design. It saves legislators from having to specifically carve out exceptions in the law to allow dangerous things things. Nobody wants their name next to something that sounds like, "XYZ is allowed to kill some people". Instead, they just try to corral them in when it gets to be "too much."

If that's the case, that sounds like a good argument to not allow incorporation.

Do you have another suggestion for how to get icky things done which must be done?

These fines are a scam targeting American companies.

Just trying to get the facts straight. Google provided the ability to search your site. They also allowed you to show ads/make money from these searches. If you wanted to use this, you had to only show Google ads.

I don't understand how that is illegal.

I think the press release [1] did a good job of detailing the specific activity that was over the line:

> Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.

Even if the search result and some ads were provided by Google, requiring exclusivity for search adverts was too much.

[1] http://europa.eu/rapid/press-release_IP-19-1770_en.htm

> Even if the search result and some ads were provided by Google, requiring exclusivity for search adverts was too much.

Which completely ignores why ad networks have those restrictions.

At one point it was common for crummy web pages to sign up for every ad network. All of them. Because every one you signed up for was more money. Then the whole side of the page would be ads from different networks.

The obvious problem is that the advertiser is paying the website for eyeballs, but nobody is ever going to look at all of those ads. It's hard enough to get anyone to look at your ad box when it's the only one on the page. So you're paying for eyeballs and then not getting them. It was like buying a TV ad spot and discovering that the TV network had put it in the middle of an uninterrupted two hour block of just other ads. No surprise that the ad networks then required sites to stop doing that.

If an ad network wants to put restrictions on the volume of ad space in comparison with content on the page, they can do so, but requiring exclusivity isn't the same thing as that.

Measuring the "content on the page" is hopelessly ambiguous and easy to scam.

Even trying to price just based on how many other ad networks there are is problematic. For each additional ad network the value of each ad goes down. Even adding a second one may cut the value more than in half compared to exclusivity, because if the user sees the other network's ads first and they don't appear relevant they may not even look at yours, and a user who sees a larger number of ads may not look closely at any of them.

If the price offered for any non-exclusive placement is more of a reduction over the price offered for exclusivity than the amount gained from the other ad network(s), how is that any different in practice than requiring exclusivity?

>Measuring the "content on the page" is hopelessly ambiguous and easy to scam.

Is it?

It seems pretty simple to audit your 10,000 largest ad-spend domains and check to see if they're actually just ad fraud. You'd need maybe 300 person-hours to do so, at an overhead-in cost of, let's high-ball it, 100$/hr, which puts you at a cost of $30,000.

If you mean the process is impossible to automate, then don't try to automate it. You can catch 99% of fraud with very low-effort manual review in most industries. That Google doesn't do it doesn't speak to the inability to get it done. It speaks to their unwillingness.

In short: exclusivity is there to choke out other ad networks.

>If the price offered for any non-exclusive placement is more of a reduction over the price offered for exclusivity than the amount gained from the other ad network(s), how is that any different in practice than requiring exclusivity?

The comparison you're making in the last paragraph is a common mistake in examining competition scenarios. The comparison isn't between pricing between the market leader and the incumbents following the anti-competitive behavior. It's the comparison between the prices we would have had no anti-competitive behavior existed in the first place.

I believe Google makes enough cash to hire people who could take care of those spammy websites.

Instead, they consciously choose themselves to be a monopoly.

What do you mean "take care of them"? If they're not allowed to restrict you from displaying their ads next to ads from other networks, that's the exact thing the spammy websites were doing.

From the press release

>Google has abused this market dominance by preventing rivals from competing in the online search advertising intermediation market.

>Based on a broad range of evidence, the Commission found that Google's conduct harmed competition and consumers, and stifled innovation. Google's rivals were unable to grow and offer alternative online search advertising intermediation services to those of Google. As a result, owners of websites had limited options for monetizing space on these websites and were forced to rely almost solely on Google.

This just doesn't make sense to me. So Google offers the website search functionality. It then says "If you want to run ads, you have to use our ads" a few years later Google says "If you want to run ads, you have to give us the best N spots, and all other ads have to be approved by us." Because of this the EU concludes "rivals were unable to grow and offer alternative online search advertising intermediation services."

I am really trying to read the logic some other way but the logic appears to be as follows

1) Google let people set up search pages on individual websites.

2) Google set the terms for ads on those search pages so that Google had exclusive/best ad spots on those search pages.

3) 2 limited competitors ability to develop an alternative to 1.

4) Because Google had a dominate market position, 3 is illegal and should be fined.

This honestly feels pants-on-the-head crazy to me because I do not see how this logic doesn't apply to Google.com. Should Google be forced to let Bing run adds on "google.com/search?q=shoes"? No! Yet if it is "ShoeReviews.com/search?q=shoes" suddenly Google is required to let Bing run adds on it.

Edit: Formatting

I think a thing to keep in mind is this is about antitrust and "Google is dominant in the market for online search advertising intermediation in the EEA". Exclusivity deal was nothing strange but abusing "this market dominance by preventing rivals from competing in the online search advertising intermediation market." wasn't ok.

The exclusivity deal might have been fine were it not for Google's dominant position.

The market dominance is really the key thing here. Just like last time Google was caught pants-down violating it, anti-trust goes like this:

If you use market dominance in one market, to stifle competition in another market, that's anti-trust!

The one market is Search, the other is Advertising.

Based on the bloomberg videoclip showing Vestager explaining the decision: You have your second point (bullet 2) wrong. Google’s exclusivity clause said that if you use google search-box on your site you cannot use any other ad broker on any of you other sites.

Because, as I understand it, Google was saying that if you used it search service, you were prohibited from showing non-Google ads anywhere else on the site.

You couldn't just use Google Search and accept ads in those search results a cost of use. This sounds rather like abuse of a dominant position in one area to squash competitors in another.

>you were prohibited from showing non-Google ads anywhere else on the site.

Can I get a link or a quote to support that? If that is the case then yes, it crosses a line but I didn't see any in the linked article to support that view.

Edit: I reread the article and I think you are wrong. It specifically says on search pages. From the article

>In 2006, Google started to include "exclusivity clauses" in contracts which stopped publishers from placing ads from Google rivals such as Microsoft and Yahoo on search pages, the Commission said.

>From 2009, Google started replacing the exclusivity clauses with "premium placement" clauses, which meant publishers had to keep the most profitable space on their search results pages for Google's adverts and they had to request a minimum number of Google adverts.

I think I'm wrong too. Here's the EC press release explaining the rationale:

http://europa.eu/rapid/press-release_IP-19-1770_en.htm

The premium placement clause for a different Google product is still an antitrust violation.

Antitrust law, despite the name, isn't limited to abuses of monopoly power. It includes the use of dominant market positions in one market to reduce competition in another.

Eventually they are going to fine Google for showing only Google ads on Google's search page.

That kind of already happened:

https://techcrunch.com/2017/06/27/google-fined-e2-42bn-for-e...

As in: didn't happen, and Google was fined correctly:

"Evidence shows that even the most highly ranked rival service appears on average only on page four of Google’s search results, and others appear even further down. Google’s own comparison shopping service is not subject to Google’s generic search algorithms, including such demotions."

I can't wait to walk into a Walmart and see poster ads for Best Buy near its entrance. Why is Walmart abusing its dominance as a retailer ? (This line of reasoning actually makes sense to some people.)

For starters, Walmart and Google are very different things.

Walmart is a store, and sells things. Best Buy is also a store, and sells many of the same things Walmart sells. They are competitors in the market for selling electronics. Competition between them is good, and so they aren't required to advertise each others' stores.

Google is a search engine. Bing and Yahoo Search are also search engines. They crawl and search the same websites. Competition between them is good, and so they aren't required to advertise each other's search engines.

Google Mail is not a search engine. Google News is not a search engine. YouTube is not a search engine. Google Play is not a search engine. These are all different products from Google Search. Thus, Google giving preferential treatment to these products in its market-dominant search engine would be a textbook example of an antitrust violation: using a dominant market position in one market to interfere in the another market. (It depends on the jurisdiction's specific antitrust laws, but it may not matter where the competitors' products show up in the search results if Google is giving preferential treatment to its own competing products in searches for those products or the search terms that would list those products.)

If you want to go down the slippery road of analogies, a better one would be:

Google is Walmart, offering all kinds of products. Carrying Kellog’s cereals (and many others).

Recently it started producing its own brand, Cerealify. Once it started producing its own brand, it’s the only brand you can now buy at Walmart. It’s also the only brand featured in marketing materials (catalogs, flyers, posters). Kelloggs, and other brands, can only be found in a warehouse 5 miles away.

How’s that for competition?

I'm not sure if you're saying that the fine makes sense or you're being sarcastic and saying it doesn't.

Google is leveraging its power in search by making sites not display ads from its competitors if they wish to use their search.

Sounds uncompetitive to me.

Not leveraging dominance in one area to push a different area is the basis of our anti-monopoly laws.

While I agreed the shopping issue was an issue of leveraging dominance, this seems more reasonable, if you want to monitize our free service, you have to use us to do it. At the moment I cannot come up with an example of that situation that would be an antitrust violation.

You literally just provided the example.

Product A: dominant search product

Product B: non-dominant advertising product.

If you want to use product A, you need to also use product B. That alone is sufficient to create an antitrust violation. It's almost literally the textbook example of an antitrust violation.

But Google didn't stop there--they required exclusivity for product B for several years, and even after that ended they still required premium placement. Either way, they just compounded the severity of the antitrust violation.

Product A is not profit making, but it bring public goods.

Do we want to subsidize it? Or just let it die as the free market works?

Product A, i.e., the search engine, is not just profit-making, it's been Google's primary source of revenue for the the past decade. Google makes billions on paid search results placement. It's the foundation of their business model. Display Ads, Android, etc., are relative drops in the bucket in comparison.

So, do we want to subsidize it? No, because it's a private product offered for profit.

Should we let it die? Sure. Google's not the best search engine anymore, just the biggest. If it has to face some competition, they'll start improving the product again, which benefits everyone. And if it doesn't improve the product, it deserves to die.

It might be that I don't see how what you classify as Product A and Product B are different products. I see Product B as the monetization feature of Product A. If I "squint" I can see how they are different products but I am not convinced.

Product A is the search engine, so you're paying for search results placement, which is how Google monetizes search.

Product B is display ads, which are displayed on other (almost always non-Google) websites. No searching involved...

I don't see how they're even remotely the same product. They're similar in the sense that their forms of advertising, but they're very different forms of advertising. Search placement is intentional advertising (in the sense of targeting prospective customer's "intent" to use/buy) while display ads are awareness advertising. The proof is in the very different rates: search engine placement terms can cost several dollars per search. That same amount could buy hundreds or even millions of display impressions.

European Commission anti-trust rules are stricter and have more teeth than other large market's 100 year old laws. They don't borrow from their case law either.

Its current embodiment is only 10 years old so they are at the stage where they are required to make a point. If its too vague, which would fit your observation, challenge it and see what the venues for appeal or courts are in that supernational government.

Was this service free? It seems that if sites were modifying the results page to re-arrange ads, they were probably using the Google Custom Search JSON API, which is a paid service ($5/1000 queries): https://developers.google.com/custom-search/v1/overview#Pric...

Because forcing exclusivity is anti-competition. If you want a competitive ecosystem, you create laws that do not allow the largest player in a market to force customers to exclude their competitors in another market in order to use their primary product.

If you're a libertarian, you would think that's fine, but in a libertarian world one company would have 97% of the market, and if you wanted to use their electricity, you would be forced to buy your food from them.

Official Press Release from European Commission: http://europa.eu/rapid/press-release_IP-19-1770_en.htm

With 500 million EU citizens, that's about €3 per person.

This makes me wonder, how much does Google make from showing ads to one person?

About $8 billion revenue per quarter for EU + Middle East, let's say roughly 60% of people in Europe use the internet and > 90% of them use Google.

Therefore: 8,000,000,000 / (500,000,000 * 0.9 * 0.6) = $29.63 per person revenue per quarter. Could be as much as +- $10 given how arbitrary (research based, but still guesswork) my inputs were...

Somewhere around $100 per person per year seems insane but I guess how much do you spend per year on stuff?

P.S. please feel free to correct my figures!

This really puts things in to perspective. Subscription startups looking to get some percentage of the population to pay $10 a month can never reach the scale of google advertising when they are extracting nearly that much value on average from every single person.

Well that's part of the problem inherent with the subscription model, isn't it?

Google can make >$100 a click for ads on mortgages or insurance keywords, but subscription models are locked in to revenue that doesn't scale with the category of use - unless they become some sort of affiliate service.

A friend of mine bought a house from a cost-per-click ad...

If the seller has $1000 per click, that's really going to distort the market...

If you are comparing with Netflix, then you should consider family accounts, where many people share that $8/m

> P.S. please feel free to correct my figures!

Presumably the value of advertising is highly correlated to the amount of money you spend (on things you have some choice over).

Disposable income is a strongly skewed distribution (across countries, within most countries).

An average won't help you much if you want too know how much Google makes off you!

That $100/person isn’t spending by individual users. They are spent by companies advertising and paying for clicks.

Guess how many times an average person clicks on an ad knowingly/unknowingly.

So: who is giving the money to the companies that they use for advertising?

other companies ?

Consumers...

In AdWords the CPC for some keywords is around €3. Obviously not every EU citizen will be the target of these keywords but Google can increase the CPC to recover the money.

There are plenty of keywords where it's 10x that Plumber PPC keywords can be £20-40 in the UK

Hopefully far more than €3 a year.

What price do we sell our personal data for?

The price of using Google.com, YouTube.com, Gmail.com and many many other services, for free.

And I thought I was "paying" for that by having 15 minutes long "ads" thrown at me every for every 5 minutes of content I watch.

YouTube seems to be getting really bad in that regard, even worse than TV.

That's not quite right.

While you can get ads that are 15 minutes long they can always be skipped within 5 seconds. That's not even comparable to television.

Block the ads. You have every right to do so. There is zero obligation to watch ads. If a company like Google can afford to operate a service like YouTube, then putting it up in the first place is the cost of doing business. I happily block ads on all devices I use and am in control over, even at work.

Pi-hole, uBlock Origin (even kills the adblock detectors), Privacy Badger, Decentraleyes, Tracking Token Stripper, Webmail Ad Blocker, etc.

Ads. What ads? You have a VPN set up on your home network, you can pass your mobile phone through it so as not to get ads even while away.

If everyone paid for youtube, they'd still show you ads every five minutes and harvest your information. Then people would be telling you that you have to suffer this because you don't pay for the bonus package.

Sure, but I for one would pay €3 a month to not have google harvest any data from me. If they're making €100 a month from me, that's one thing.

around $70 p. a. IIRC.

> They were setting chrome as default browser in android. Also they did not allow changing the default search engine so easily.

Isn't this the same case with Safari on iOS devices?

Update: I posted this before the motivation was published.

I guess the difference is market share...

No, not really.

Basically the way the EU sees it, Google has a monopoly in a market: mobile operating systems. That is, if you're an OEM and you want to sell a device with an operating system, Google is currently the only place you can really turn. Apple exists but since it doesn't sell its operating system, it's not a participant in this market.

So the EU saw Google saying to OEMs "you can have Android but you have to install our stuff on it or pay extra" and decided that Google was using its monopoly position in one market (mobile OS) to give itself an advantage in other markets (app stores, browsers, search). They see this as anti-competitive.

As far as I know, Android is open source and any OEM is free to use it without asking permission. The licensing program is for the right to install proprietary Google apps like the Play Store or Google Maps. There are plenty of Chinese OEMs who aren't licensed and sell phones without the Play store.

Amazon tried to sell Android without Google Play, but the resulting Amazon Fire Phone didn't do very well. Unless Google is banned in your country like in China, no OEM wants to risk skipping out on Google Play.

The code is open source but "Android" is trademarked. You can't call it an "Android" phone unless Google lets you.

Yes, and that directly causes a device to fail SafetyNet Attestation which can cause some third-party apps to not work even with sideloading/different app store.

Edit: like Netflix, Hulu, and Snapchat

Google could satisfy EU by cancelling OEM Android licensing programming and reducing consumer choice to Google phones only, relegating OEMs to suppliers like "good" Apple, and putting most OEMs out of business. Good job, EU.

Google could do that, but it would hurt their business tremendously, as the amount of diverse brands which provide their own unique flavor on top of Android is what helps them keep this dominance.

Reducing the choice to just Google phones running Android will spark other providers to develop their own OS and increase competition in the market, which would indeed lead a great deal of people to say "Good job, EU" if the EU was the catalyst for such a scenario.

The reason android exists was to allow OEMs to compete with Apple.

Google could shut it down and only publish their own phones, but they don't have the chops to become a premier customer goods maker. The field would be free for Apple until Samsung catches up. In the end Google lose negotiation power in getting their search engine, browser and services on Apple's and Samsung phones.

Basically they would be the main loser in the move.

And the fact that iOS is installed on devices made by Apple itself. Android is the OS used by different phone manufacturers.

If iOS would have the marketshare of Android, it would be hit by the same regulations.

No, if Apple opened it's OS to OEMs, it would be hit.

Apple isn't getting fined for it's app store which is essentially the same structure as Google's OEM hardware setup

> Apple isn't getting fined for it's app store

They're working on that, give it some time. The complaint from Spotify gets the ball rolling. The EU will do the rest. Two or three years from now they'll have a $4 billion fine for Apple.

"Spotify announced this morning that it’s filed an antitrust complaint against Apple with the European Union, alleging that the iPhone maker is harming consumer choice and stifling innovation via the rules it enforces on the App Store."

https://www.theverge.com/2019/3/13/18263453/spotify-apple-ap...

It's based on marketshare. iOS doesn't have enough marketshare on the smartphone market to be bothered by those laws. If apple was controlling the whole smartphone market, it could fall under those laws, even if its operating system wasn't open to other manufacturer.

Agreed, and this needs to stop in my opinion. The EU makes an enormous amount of money by suing tech-giants over and over again without doing enough research to know what companies in this sector are doing.

They have a very good idea of what the tech giants are doing, don't you worry.

Those aren't based on nothing. There is laws and being a tech giant doesn't grant the right to go around those. If those fines aren't justified, those companies can use the justice system in place to fight back, like everybody else.

It's not a free for all, get free money from tech companies with no legal background.

Antitrust laws aren't specific to EU by the way.

I was wondering where funds from such a fine go:

"Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget. This money is not earmarked for particular expenses, but Member States' contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers."

That happens to most fines, everywhere.

In case this is in accusation of corrupt practices aimed to increase the EU budget, note:

- Fines account for <5% of the EU's budget

- The EU budget is relatively small compared to national governments' budgets. EU: 150 billion, Germany + France + UK = 5 Trillion (5,000 billion). That's leaving out 24 smaller economies. National governments have a lot of input in the decision-making process and couldn't care less about a billion here or there. Especially if it risks impacting perceived rule of law.

- In any large bureaucracy, individual decision makers have incentive structure that often diverge fundamentally from those of the organisation as a whole. A prosecutor will have no financial or career advantage tied to the EU's finances. In this specific example, the commissioner responsible (Vestager) is somewhat likely to leave the commission after the May elections anyway, because of another pro-competition decision that was decidedly more important and not appreciated by France and Germany, namely prohibiting the Siemens and Alstom merger.

If you sum up all the fines collected by continent, you will see that (a) EU companies pay fines roughly equivalent to their share of economic activity in the EU, (b) Asian companies pay comparatively more, and (c) US companies are actually fined far less than their share of the economy would suggest. The most likely explanation is that rather high standards of enforcement and corporate governance in the US require less EU intervention.

> the commissioner responsible (Vestager) is somewhat likely to leave the commission after the May elections anyway, because of another pro-competition decision

Nah, EU commissioners are very unlikely to stay in their post when the Commission changes anyway, regardless of performance. That's because they are an expression of national governments' priorities at the time of commission composition (every government gets 1 commissioner, and usually tries to place it in an area it is particularly interested in - which obviously changes when a government changes "colour").

This has become even more true ever since EuroParliament obtained a meaningful vote on approving or rejecting the Commission. Because the Commission President is now a political figure expressed by the party with the most votes in EuroElections, it is almost inevitably bound to change every 5 years, when Parliament changes; when the President changes, the whole Commission usually changes as well. I fully expect this to happen this year.

In the past, Commissions would change on a different schedule, without any real vote, and it was mostly seen as an administrative body anyway. This meant a President would not change until it effectively resigned or lost the trust of all national governments, which in turn allowed other commissioners to stay on if they were already working together well, with EUParliament just rubber-stamping. This changed after the corruption scandal of 1999.

> The most likely explanation is that rather high standards of enforcement and corporate governance in the US require less EU intervention.

Or maybe the american political influence is stronger?

It would need to be stronger than EU member states' influence, which seems unlikely. I also don't remember ever hearing of even attempts to exert influence on these investigations.

Note that such agency actions are firewalled from even their EU/US/national political leadership. Even if Trump managed to convince Merkel to intervene, she wouldn't really be able to. To illustrate with a reverse example: Imagine Macron trying to get to get to a judge in a California District Court. There are multiple layers in between where they would tend to consider the call a prank and hang up.

And maybe more capital is directed towards lawyers and litigation making it more expensive and difficult to extract cash from large US companies.

> - Fines account for <5% of the EU's budget

This is maybe not as comforting as you think it sounds. 1.5B is 1% of the budget that you describe below, which is non-trivial -- that's make or break money. I'm guessing it exceeds the total annual contribution of several member states (I tried to find the actual budget, but talk about incomprehensible documents [1] -- what's an "own resource"? What's with the obsession with sugar?). To that end it seems like fines like this are a critical part of the EU's budget.

> If you sum up all the fines collected by continent

I'm wondering if you have a reference for that -- I can't really find anything definitive and it would be interesting as a data point.

[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A...

I think I know where you are coming from, for a nation 1% is significant, but I don't think you realize what the EU budget is used for.

47% subsidies for farmers, 30% regional support subsidies (e.g. they might co-found an R&D project in an outermost region in a country):

https://en.wikipedia.org/wiki/Budget_of_the_European_Union#P...

So mostly subsidies. If there's a deficit, they can cut the regional subsidies which I believe are mostly individual projects with relatively short timespans.

The farming subsidy is more like social security, I think you'd have riots in France if you cut that significantly. Which is sad.

That is a good point. I guess in theory the fact that the amounts are rebated from the next budget could provide an incentive for individual members to push for increased fines, but given the reduction would be proportional, and national budgets are so much larger than these amounts, it wouldn't really amount to a significant national budget windfall.

> rather high standards of enforcement and corporate governance in the US require less EU intervention

More likely that US companies are so comparatively wealthy that even apparently large fines aren't as large as fraction of revenue. Anchoring fallacy.

That's one part of the story. There's only one tech company in all of Europe that can easily digest a $1.7 billion fine.

SAP is Europe's most profitable tech company by far. About $4.5 billion in net income ($7b in operating income).

The US has at least 16 tech companies at that level of profit or higher.

Just Microsoft + Google + Amazon + Facebook + Apple = $185 billion in annual operating income.

In terms of sales, those five combined companies are the size of Turkey or Saudia Arabia in GDP (they'd be around the 19th or 18th largest economy in the world).

Is profit and annual operating income supposed to be equivalent?

I was using economic activity (i. e. revenue) in the EU, not worldwide. A company not operating in the EU shouldn't be fined, obviously.

sounds reasonable to me. this way, you get a disincetive to break antitrust rules for google, while not opening up a fight for shares of the money by their competitors afterwards. EUR 1.5b (~$1.7b) is a nice sum to fight over, after all.

edit: of course, how big the disincentive is is up for debate. :P

1.5b€ isn't a lot; Germany + France + UK = 5 Trillion (5,000 billion) as a sibling comment mentioned. They don't care about 1 billion here or there.

It would be a lot for any one of Google's competitors to fight over. That is, if the money were e.g. supposed to go directly to the competitors that were harmed here, there would be a huge allocation fight within minutes of this decision...

But it doesn't, it goes into the EU budget.

exactly. so it sounds reasonable to me. what are debating again? :P

Where did you expect them to go?

I had no idea, and was just sharing what I found

"The fines therefore help to finance the EU and reduce the burden for taxpayers."

reduce burden for taxpayers... yeah. how? i don't see my taxes dropping because ppl get fined >.> even if the amount of fines would raise consistently by 1000% still i would pay the same taxes, guarantee you that.

If you made the case that everything they said about where the fines go instead of budget is wrong, sure you would be correct. I would expect you to put forward an argument with a bit more substance than "taxes will never go down, I guarantee it" in that case, however.

> i don't see my taxes dropping because ppl get fined

What were your tax contributions to the EU last year compared with the year before?

That's small money for the Google.

Last year they gave Google €4.34bn fine and in year 2017 they gave Google €2.42bn fine.

Basically, at this point I'm sure there is a standing ~€2.5 bn section in Google's annual budget simply labeled "misc. EU fines". If they manage to keep it under €2bn in any given year they probably consider that a win and pay out bonuses to their legal team.

The fine is only part of the EUC action, the fined entity has also the obligation to change their behavior as suggested by EUC to stop asap their abusive actions.

How do you reconcile this with the knowledge they’ve been fine $x billion every year for the past 3 years (at least?)?

At what point does Big Corp run out of things to abuse?

If the fines just become a cost of doing business the finance and legal teams can probably get creative and invent new ways of mashing up old abuses over time.

I think the underlying theme here, then, is that the fines are necessary but not sufficient.

There's nothing really stopping the EU from making the fines larger if they don't correct their behavior. The point of a fine like this isn't to completely cripple a company, but to make it understand that there are very real consequences.

It's very simplistic to look at their yearly revenue and say they can just absorb it. If the money they made off of an activity like this was less than the fine, absorbing it won't make sense.

Even if they absorb it, accounting for R&D and other expenses on a product, the profit margin could be sufficiently ruined for the entire product to no longer be viable or a competitor could take over the market easily.

All the fines have been about the same time period (2010-2016), but on different products (Shopping, Android and now Adsense). It's not Google changing stuff and getting fined again.

That's why there's this provision in the official EU press release:

Finally, Google is also liable to face civil actions for damages that can be brought before the courts of the Member States by any person or business affected by its anti-competitive behaviour. The new EU Antitrust Damages Directive makes it easier for victims of anti-competitive practices to obtain damages.

This is why at some point executives need to face potential prison time. The EU should put the requirements to stop the abuse and if next year the change hasn’t taken place, investigate individuals responsible.

That's right. They say corporations are people too, however corporations aren't sent to jail. They aren't barred from voting. They have more rights than human people.

Imagine if Google went to jail and had to work for 13 cents an hour making license plates.

Similarly, there's probably a ~€2.5 bn line item in the EU budget that reads "misc. Google fines". ;)

The legal team must be proud of their achievement

Unlikely: google has a 2017 revenue of 109.65 Billion US dollars. that's up to 5 % (conversion rates guessed) of it's total REVENUE. This will hurt their profits even more. A fine of this magnitude really makes the difference between funding a new product / moonshot or not I figure.

Google's free cash flow in 2018 was around 21 billion, and Europe/Middle East/Africa make up around 33% of their business. If you assume that the margins and capex in that area is similar, then the EU fines have nearly exceeded Europe's portion of Google's FCF for 2018.

Nah, I think 10x the fine and you're really starting to hurt.

50% of revenue sounds more like chopping off an arm or a leg than starting to hurt.

I was kidding, of course. Profit margins, even for Google, let alone a small digital business, are a fraction of revenue, typically negative.

That's exactly what needs to happen. Google needs to lose a leg or an arm. Something that significant, but in corporate terms. Like maybe force them to divest of European holdings. Separate that business from North American operations. Or just exile then from Europe all together.

It's probably what they would normally pay in taxes if it wasn't for the current tax evasion schemes in play.

It does have some effect; rumors are that Google will start a Browser-Choice dialog similar to Microsoft on Android soon. [https://www.golem.de/news/android-google-fragt-nutzer-kuenft...]

To my knowledge each country within the EU can also seperately fine Google. It could add up very quickly.

Personally i also think getting fined constantly is not a reliable business model. :)

It's a risk / reward thing, if getting fined for less than what they earned (both in actual money and in removing competition from the equation) then it's worth the risk.

You forgot to state the follow up: these fines require changes, and lacking changes get higher very quickly. Losing 1/3 of you advertisement-market is not profitable either if it gets to that.

These top EU fines so far are extremely large, larger than anything a US regulator or jury orders, perhaps larger than the largest ever US fine.

Just because they are larger than US doesn’t mean they are extremely large - I would argue it’s US fines that are too small, and regulators being too mild.

As for larger ever US fine - perhaps for Google. US can also be rough.

It seems like EU's policy of retribution on Big Tech for US fining European banks.

https://www.fnlondon.com/articles/european-banks-face-dispro...

A good faith interpretation would be that the US has the most advanced system for financial regulation, while the EU is better (or emphasises) antitrust and privacy regulation.

Both seem to perfectly consistent with New York being the world's premier financial center and Europe being somewhat renown for stronger consumer protection.

(which leaves Volkswagen as a terribly embarrassing example of regulatory capture in Germany)

To be fair, roundup has a magical characteristic in only starting to cause cancer once Monsanto was no longer a US company.

Some German states own parts of VW and clearly would prefer to believe it to be honest mistake VW has learned from. No one should be surprised that the Deutsche Bank are criminals either. I dont think those cases are anything more then corruption preventing proper prosecution. Big corporations simply get away with a lot of stuff if its politically inconvenient. I mean the HSBC laundered billions for drug cartels. Heckler and Koch breached weapon embargos. Non of that is in any way a grey area but plain and simply criminal conspiracy.

> A good faith interpretation would be that the US has the most advanced system for financial regulation

One only has to take a peek at the HSBC cartel scandals to know that's patently bullshit.

HSBC is a British bank. Yet, skimming https://en.wikipedia.org/wiki/HSBC#Controversies it appears almost all investigations and fines were the result of SEC and other US investigations.

Watch the HSBC episode of 'Dirty Money' on Netflix. They got away with a tiny slap on the wrist for absolutely glaring circumvention of anti money laundering rules. The best way I've heard it said is America has some of the strongest financial regulations in the world, there's just laughably weak enforcement of those regulations.

This will be a boon to sites who have lost a lot of their revenue from their "custom search" function on their own website. As described in the article, Google has been squeezing these sites in order to keep more of the advertising revenue for themselves. (You can see it in their results by looking at how the ratio of money made on Google sites versus third party sites has been consistently shifting into the Google side of the pie)

Now I wonder if the EU will take on search engine front ends like startpage.com or duckduckgo who use Google results. Will they be allowed to run their own ad network alongside the Google results? If so that would make them a lot more viable.

Nothing will happen to those other sites because for this particular case Google has already changed its practice after the EU filed an objection in 2016. This fine is retroactive to cover the damages made during the 10 years of investigation. https://www.marketwatch.com/story/the-latest-eu-fine-on-alph...

Understand that there are two "kinds" of custom search. One, which is discussed in the BBC article is "AdSense for Search" which is and advertising program you could engage when you put a Google search box on your web site.

The other kind, which is not discussed here, is where you have a web front end like startpage.com or duckduckgo.com which is making an API call to a search index in response to your query. In the US, the two english language indexes with decent precision and recall are provided by Google and Bing[1]. One of Google's big partners there is Infospace which uses Google results in many of their properties. That said, when you use Google results in your search "engine" web page, you are bound by a different contract than the AdSense contract. And, like the AdSense contract, it is (or at least was) pretty restrictive on what sort of advertising you could do around Google's results.

[1] Bing either directly or through Yahoo!'s BOSS API if that is still a thing.

Is there an other article with some background / explanation what Google did in this case? That they were "blocking others" doesn't tell me much.

Edit: The linked article is now updated, at the time it was basically just a paragraph stating the fine.

It's in the official press release: http://europa.eu/rapid/press-release_IP-19-1770_en.htm

That doc says Google's deals with publishers relating to AdSense for Search (which e.g. shows ads in newspaper sites' on-site search results) harmed competition by restricting what their partners could do with other potential providers. And that this was abuse of Google's dominant position in the relevant market.

Here are a few key claims about what Google did, from the European commission press release:

> Google's provision of online search advertising intermediation services to the most commercially important publishers took place via agreements that were individually negotiated. The Commission has reviewed hundreds of such agreements in the course of its investigation and found that:

> As of March 2009, Google gradually began replacing the exclusivity clauses with so-called “Premium Placement” clauses. These required publishers to reserve the most profitable space on their search results pages for Google's adverts and request a minimum number of Google adverts. As a result, Google's competitorswere prevented from placing their search adverts in the most visible and clicked on parts of the websites' search results pages.

> As of March 2009, Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed. This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be.

> Therefore, Google first imposed an exclusive supply obligation, which prevented competitors from placing any search adverts on the commercially most significant websites. Then, Google introduced what it called its “relaxed exclusivity” strategy aimed at reserving for its own search adverts the most valuable positions and at controlling competing adverts' performance.

> Google's practices covered over half the market by turnover throughout most of the period. Google's rivals were not able to compete on the merits, either because there was an outright prohibition for them to appear on publisher websites or because Google reserved for itself by far the most valuable commercial space on those websites, while at the same time controlling how rival search adverts could appear.

From: http://europa.eu/rapid/press-release_IP-19-1770_en.htm

Basically Google told publishers not to use any other advertising platform if they want Adsense.

""""In 2006, Google started to include "exclusivity clauses" in contracts which stopped publishers from placing ads from Google rivals such as Microsoft and Yahoo on search pages, the Commission said."""

I think this: https://www.bbc.com/news/technology-47638336

They were setting chrome as default browser in android. Also they did not allow chaning the default search engine so easily.

I believe you are referring to a different case than this one. That Android decision was in July 2018:

> In July 2018, the Commission fined Google €4.34 billion for illegal practices regarding Android mobile devices to strengthen the dominance of Google's search engine.

http://europa.eu/rapid/press-release_IP-18-4581_en.htm

Based on the cadence and size of these fines for the given offenses, they seem like backdoor taxes, not fines. They're hitting Google's global revenue over comparatively minor offenses, seemingly just enough to keep Google around as a golden goose to extract more wealth out of but not drive them away completely like China.

"We love competition; here's what we're doing to show you how much we love it!" - Google hours before being fined in anti-trust case.

They are being fined for behavior that stopped in 2016. I wouldn't bet on Google's current intentions, but being fined now doesn't mean anything.

Well, they did just say they're going to allow EU Android users to select a different browser and search engine.

The EU feels to me like one of the few forces for good in the world at the moment

There was a commentary in the German media in context of Brexit that I think really think sums the EU and her role in the world up nicely:

"Brexit shows what we have in the EU. She clears up issues among neighbors, grating them into rules and sometimes unsatisfactory compromises. But she grates them small, in a civilized and peaceful way. That's her big achievement." (rough translation by me, sorry)

https://twitter.com/tagesschau/status/1105932622000209921 (in German)

In Germany we say that the EU has replaced the battleground with the negotiation table. That's what it's got the Nobel peace prize for and I think it deserved it.

I don't think there was any prospect of war between the EU countries while the USSR was around, it seems folly to pin peace to an institution when it was a greater enemy that actually united us.

WW2 happened while the USSR was around.

Before they had a huge, modernized army that would easily win a land battle for Europe.

That's a bit misleading because the EU we know today wasn't actually around back when the USSR was still a thing.

It only became fully realized with the Maastricht Treaty in 1992, which was shortly after the fall of the USSR in 1991.

Was it responsible for the 45 years of peace after WW2 or not?

IMHO the EU is a direct result of the two World Wars, not the Cold War (we're only starting to see the results of the Cold War now).

Yeah the League of Nations was the result of the first one and it failed. Given the sheer slaughter they needed a way to forge peace as it clearly was massively self destructive.

I am not sure how true it was but I heard a theory that Europe lost much of its intellectual prominence due to so many young men dying in the trenches in WW1 - now Europe does good intellectual work now but it is more "neat thing out of Europe" as opposed to "the hotspot". I am not well equipped to evaluate the merits but the idea is interesting at very least.

Yes, after two failed attempts to conquer Europe by military force, Germans finally realized they can achieve the same effect much easier with their economical power and then created EU :)

Worth remembering that a lot of people in the UK, possibly a majority by this point, are perfectly clear as to what we stand to lose if the UK leaves the EU. :-(

Pack your bags and come over here. ;-)

Oh agreed! And don’t forget the tea. Just skip the second referendum and let all the remain voters hang out over here, so we can have tea with baguette forever.

Let's not pretend it's not a mixed bag, e.g.: 'European multinationals are aggressively pursuing one of milk’s few growth markets, where locals say they can’t compete.'

https://www.politico.eu/article/eus-milk-scramble-for-africa...

That article is about European multinationals, not the EU

At the same time, the EU spends a lot of money on subsidies just so that farms (big and small) can keep their head above water. I wouldn't mind if that was changed somewhat, give smaller farms more survivability, but at the same time it's the market forces that should be changed so that farmers get fairer prices for their products.

And this also hurts Cane sugar producers - sugar beet is much more energy intensive

Weird, since there is already a milk quota in place in Europe.

I don't think it's related to the EU as institution

I just read the quoted headline, but it's not about quotas but EU based multinationals extending their business / exporting milk powder to Africa, tripling exports in 10 years (2006 - 2016) and competing with local farmers to the point they are put out of business. Not sure how the EU fits in there, other than that they provide an economic and legislative climate that allows milk prices to go low enough to make such a business viable.

Then the comment isn't related to the headline

It really is a mixed bag, but here in HN the EU gets very good publicity because it's always compared to the US. (Not that I'm pro-EU or anything)

naw. just a giant nationstate trying to control its own resources. theres nothing good about it. at best you could argue its neutral. Personally i see this as nothing more than the occasional revenue dipping. Big companies have to take it because of the market and the eu knows this. anytime theyre short on funds theyll fine facebook or google.

absolutely

Pretty naieve view to accept an effectively unaccountable body of such incredible size. Almost every policy is without a voter mandate.

You could say the same about your own country's government.

Do you get a vote over antitrust regulations enacted by your own government?

You usually vote a party which might (or not) have a high-level guidelines over a few select policies, but otherwise trust them to make the best decision based on how their political view matches with yours.

You elect EU parliament member the same way, and you are free to vote otherwise if you do not like their work (and yes, the actual effect of your individual vote is statistically irrelevant, just as the vote for your own government).

So you think scaling that up to a massive scale where a handful of interests, namely France and Germany, have near complete sway over the agenda makes sense?

France and Germany have the most members, but not nearly enough to take decision by themselves or have control of the agenda.

Besides, the point is moot, because parliament members tend to group themselves based on shared political views, rather than by country.

That countries with more population should have more representation and more weight in the decisions, to me makes sense.

I wonder if that’s why the policies are generally so sensible?

Except that is a fiction you have created because it meets some presupposed view you have. The EU, application of legislation regarding technology is almost entirely designed to attack those companies on the basis they don't recognize revenue in France, Germany.

And you think asking the public for their opinion would mitigate rather than aggravate that?!

You don't have to accept it to recognize that it can do good things.

Investor reaction: Google was slapped with another huge EU fine — and investors didn’t bat an eye [0]

[0] https://www.cnbc.com/2019/03/20/google-eu-fine-investors-not...

just wondering, what's up with the previous two fines? did Google pay? is it still in courts?

They pay immediately then dispute in court.

Google needs to be broken up. If Microsoft could be broken up, Google deserves it 100x.

They control way too much.

When did Microsoft get broken up?

It was the result of a (later overturned) ruling in 2000: https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...

So basically nothing happened in the end?

How do you propose that Google should be split?

People on HN ask this question every time that the subject comes up, and I'm a bit confused as to whether it's genuine curiosity, or whether it's meant to show that breaking up Google would be impractical.

I don't know much about the internal structure of Google, but my naïve intuition is that it could be broken up into several profitable companies relatively easily a whole a bunch of different ways, given how many different products there are.

It seems like the first thing would be to split off Youtube, which is apparently already independent enough that it has its own CEO. Actually, I'd be comfortable arguing that Youtube is big enough by itself that breaking it up somehow would benefit consumers, but at least in that case it does seem hard to imagine how it would be done.

Then, I would guess the next step would be to split Google Search from everything else. As far as I can tell, it's mostly stand-alone, and most integration with other products seemes more harmful to consumers than beneficial.

After that, it gets harder, but I feel like you could do something like this:

1. Adsense 2. Gmail, Calendar, Drive, Docs 3. Android, Pixel / whatever other hardware Google makes. 4. Everything else

Wouldn't breaking up Google into companies with complete control over their respective markets not really achieve the desired goal?

E.g. If Android becomes it's own company, it's still the only player in the mobile operating system space. If search was it's own company, it's still the dominant search engine.

Admittedly, I wasn't around at the time, but what use was breaking up Ma-bell into the sub companies, from a choice perspective? I certainly understand that from a telephony devices perspective, consumer choice drastically increased, since third parties could now make telephones, but you still ended up with local monopolies for all of the fractured components.

Also, how is search's integration into other products harmful in all circumstances? It's extremely convenient that typing the name of a restaurant into Google search gives me reviews, the menu, directions, etc.

> Wouldn't breaking up Google into companies with complete control over their respective markets not really achieve the desired goal?

As I understand, the desired goal is to stop the dominant player in one domain (search) from getting an unfair competitive advantage in another (advertising backends). It might also be true that allowing one company to have complete dominance in a particular domain stifles competition within that domain, but that's a seperate problem.

> Admittedly, I wasn't around at the time, but what use was breaking up Ma-bell into the sub companies, from a choice perspective? I certainly understand that from a telephony devices perspective, consumer choice drastically increased, since third parties could now make telephones, but you still ended up with local monopolies for all of the fractured components.

I know nothing at all about this particular topic, but I have two immediate thoughts:

1. It would be easier to break a monopoly held by a company that made just one component, because once you finished your replacement for that component, you'd be able to ship a product, whereas if one company had a monopoly on every component, you'd need to make replacements for every component.

2. I don't find "It might stay just as bad as it is now" to be a very strong criticism if the alternative is doing nothing.

> Also, how is search's integration into other products harmful in all circumstances? It's extremely convenient that typing the name of a restaurant into Google search gives me reviews, the menu, directions, etc.

Sure, but Duckduckgo does those things as well and doesn't own any products that do those things. Whereas there are some google products that seem really tightly coupled, like Drive and Docs that I can't really imagine working as well if they came from different companies. As for harming consumers, I was mostly thinking about search data → advertising.

Google does indeed need to be broken up, but much less than Microsoft. Google has actually done good for the whole world with their open source initiatives, opening of webm, etc - plus all(?) of their products are easily replaceable, unlike say windows which has exclusive programs written for it.

If by open source you mean free if they can keep your data and then some, then sure.

No, by open source I mean things like https://www.webmproject.org/, https://golang.org/, https://www.chromium.org/blink, their contributions to existing foss projects like gcc and the linux kernel, and initiatives like https://summerofcode.withgoogle.com/.

> unlike say windows which has exclusive programs written for it

(cries in Firefox)

I don't define surveillance capitalism as "good for the world".

Me neither? As I said in my post I consider their contributions to open source to be what is good for the world - nothing to do with surveillance.

I suggest that anybody downvoting this read this[1] article for a surprisingly comprehensive overview of how Google et al are ruining democracy and (mostly-)free society as they shift our economy from the traditional forms of capitalism that were built on mass-production, finance, etc into ^surveillance capitalism^ based on omnipresent surveillance and behavioral manipulation.

The social, political, and economic damage Google is causing as one of the leading forces pushing the world into surveillance capitalism vastly outweighs the "good" derived from a few technical trivialities.

[1] http://nymag.com/intelligencer/2019/02/shoshana-zuboff-q-and...

Survallience capitalism is a troubling trend and they may share blame for participation but blaming Google for it /existing/ is just disingenuous scapegoating. Long before Google was a thing stores were trying to get addresses and advertisers were trying to manipulate behavior and they have literally nothing to do with industrial outsourcing.

Former intelligence agents have gotten into business intelligence as well engaged in legal surveillance work to predict trends just doing things like counting cars in factory lots from public spaces to analyse worker demand and thus production and sales - surveillance and capitalism are bridged by being in the same reality and a legal system where everything not forbidden is permitted.

They've already seen that coming, that was probably a motivator to create Alphabet. Breaking them forcefully would do nothing. What do you think would happen? Decouple AdWords from search? Ok. Decouple Google cloud? Hmmm. Ok.

The end result would be that project leaders would be CEO-s belonging to Alphabet, but everything would be still running on the same architecture, platform, services.

Did anyone play Dune II back in the day? In a world where North America is Atreides, Russia being Harkonnen, the EU is conveniently taking the place of House Ordos (ambitious vying by disparate powers).

Apart from how absurd the justifications and the amount of these billion dollar fines are, who would be the recipient of this fine if paid?

I'm really an amateur on this kind of topic but I was wondering: Is there a way the fine grows as Google does not cooperate with EU rules?

Yes, they can impose larger fines if Google doesn't cooperate, but they have; the behavior in question stopped in 2016.

EU has fined Google repeatedly and likely will continue to do so.

cost of doing business in EU when you're big

The cost of engaging in anti-competitive behaviour in the EU.

As far as I can tell, being a large successful technology company is anti-competitive behavior in the EU. This fine, and the multi-billion dollar fine last year, and the multi-billion dollar fine the year before that all are apparently for violations from 2008-2016, before Google had wised up to the fact that the EU was going to get out of fines what it couldn't get out of taxes. There will be another multi-billion dollar fine next year. There will be another multi-billion dollar fine the year after that. Technology companies are sufficiently dependent on economies of scale that the commission will never run out of "anti-competitive practices" to fine them for and it will never be the right financial move to fracture enough to escape the commission's gaze. The whole Irish tax haven thing was crafty, but the EU has figured out how to get its slice of the pie.

They’re going to fine Facebook into oblivion.

Did Google ever pay one of these fines?

Yes. They are a significant enough expense that they are a separate line item on SEC filings (search for "European Commission fines" in https://www.sec.gov/Archives/edgar/data/1652044/000165204419...).

Why do you assume they didn't?

I don't know if that's the case with OP, but there's a good amount of HN users who think internet companies are above the law. Some of them also cheer it as a good thing.

First of all, I didn't assume they didn't, not sure how you came up with that. And I asked because I remember that they appealed a fine like this in the past, and I do not know how it was resolved.

Did they stop doing what got them fined?

Yes, two years ago, in fact.

Seriously, is there any way for us to see if they paid any of this.?

Fine is the new taxes.

Slap on the wrist.

more like a part of the wrist itself. They are racking up $7B in fines at the moment

- "Let's make rules that cripple our competitors and see how long we can get away with it."

- "What can we earn?"

- "Billions."

- "What's it going to cost?"

- "Less than what we're going to make."

- "Let's do it!"

> - "Less than what we're going to make."

Do you have a source for that assumption?

Should be noted that besides the fine they have to change how they operate in regards to the subject matter (which they always have, as described in the article).

True, but if you get away with this for years, it can be part of a strategy. The risk, of course, is that if you do this too often or too obvious, you could be forbidden to sell your product. But then, Google might be too important to be shut down for non-compliance.

Yep - 'don't be evil'

Yet my takeaway is it pays not to follow regulations.

I'd love to know how you got to that conclusion. Do you have internal reports from Google detailing the extra income brought by these behaviors?

They have been fined for abusing their position for a decade.

Actually I would really prefer if they were banned from conducting business in Europe. For a decade. No fines are needed.

Fully budgeted cost of doing business.

The original title says €1.5bn.

Then look at GDPR, which is a mess imho, and article 13 too

We detached this subthread from https://news.ycombinator.com/item?id=19440981.

Why is GDPR a mess? As an EU citizen (for the time being at least) with personal data I want to protect I'm quite happy with it.

As someone starting a startup there's compliance I need to do, and it's work for sure, but I still (again, for now) live in the EU as a citizen, and I still have personal data that I don't want to lose control of so on balance I'll take it.

article 13 is bad for sure. They don't get everything right by a long shot, but on balance I think the changes have been positive.

As a EU citizen I like my personal data protected. I left facebook and all other networks except Twitter and usually do not give data for any coupons in shops.

GDPR is a mess not from the goal but the implementation.

Currently no one knows how to implement GDPR correctly - e.g. how to exchange business cards, how to store information from sales leads etc.

Compare this with PCI compliance (which is about CC data protection) and it's very clear if you're compliant and if you are not and what to do.

For now this has no effect because data protection agencies - at least in Germany - are overloaded, but will lead to a lot of fines for companies that want to do everything the right way.

Article 13 is the same mess. Good in intention of making YT pay for the content they use and which is copyright protected, but _impossible_ to implement in it's current form.

> Compare this with PCI compliance (which is about CC data protection) and it's very clear if you're compliant and if you are not and what to do

As someone with an interest in this space, I can say that the PCI DSS is not as clear as you say - there is plenty that is ambiguous and open to interpretation, and often a pass/fail for each requirement hinges on your QSA's interpretation.

Implemented PCI DSS and GDPR several times, I do think there is a huge difference.

> Currently no one knows how to implement GDPR correctly - e.g. how to exchange business cards, how to store information from sales leads etc.

The only time I've seen it be a problem for people is when they are playing fast and loose with people's data.

I mean, exchanging business cards is (I would suggest) in invitation to start a conversation. I'm not personally worried about that. It's definitely not an invitation to store my data in a leads database indefinitely though.

Does not being able to indefintely store people's data in your database without getting permission first make your life harder? Good, that's the point.

-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

From: _Codemonkeyism@ycombinator.com

To: Bob@from.accounting

Subject: Great chat!

Hey Bob, thanks for handing me your business card the other day, can I add you to our sales database? We will contact you whenver we think we have some suitable widgets.

-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

From: Bob@from.accounting

To: _Codemonkeyism@ycombinator.com

Subject: Re: Great chat!

Take a hike _Codemonkeyism! / Sure, go ahead!

-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

> Compare this with PCI compliance

I've done PCI compliance, it's largely bullshit IMO. It does certify compliance with something, but it's not a particularly useful way of working out wether a company is storing peoples data securely.

> but will lead to a lot of fines for companies that want to do everything the right way.

Well, we will have to see, but I doubt it. Sure, there will be companies that want to protect people's data, but can't for whatever reason (developer time etc.), but the solution there is "don't do it". If you can't secure people's data, don't store it. "It's a bit beyond our capabilities" isn't an excuse.

> Article 13 is the same mess. Good in intention of making YT pay for the content they use and which is copyright protected, but _impossible_ to implement in it's current form.

Yep, totally agree.

> The only time I've seen it be a problem for people is when they are playing fast and loose with people's data.

For sites not in the EU, see Article 27.

If you are not in the EU, and you processes personal data of people in the EU, and the processing is related to offering goods or services to those people (regardless of whether payment is required), Article 27 requires you to have a representative in the Union.

Note: do not mix this representative up with the Data Protection Officer, which may be required by Article 37. DPOs are generally only required for pretty big data processors, and if you are required to have a DPO there is no geographic limitation on where they can be.

Article 27 doesn't apply if the processing is only occasional and doesn't involve certain especially sensitive categories, but it is not at all clear what counts as more than occasional.

Note: common system logs, such as Apache logs, include personal data (IP addresses). Logging such data is probably not a violation of GDPR, but that doesn't make it no longer count as personal data. It still counts and so you still have to follow the rules for sites that processes personal data.

It also won't apply if goods or services aren't being offered to people in the Union, but that too is unclear. You site merely being accessible from in the EU is not sufficient, but it is not clear what beyond that counts.

There is no need to be playing fast and loose with data to be totally unsure if Article 27 applies to you or not.

I sell software that is largely used for PCI Compliance, and I agree with what you say. A lot of our customers simply want "checkbox compliance" - they really don't care about increasing security, just that their QSA ticks the right box.

If the GDPR looks like a mess to you, it is because it makes it blatantly obvious and very visible how strongly the entire internet industry rejects the mere idea of privacy respecting services.

GDPR is quite good actually, we will just need to find a way to use its power for good.

Agreed. I think it's one of the biggest privacy achievements ever. We have been seeing a tremendous normalization of defiance with how user data is frequently unknowingly misused and it's time for correcting this. GDPR is a good start, hopefully US soon follows.

It's good for US tech because it is yet another cost and restriction EU startups have to face before they can grow to scale and profitability.

It's a very small cost that all companies should already be able to handle if they're to be trusted with personal data.

That's the crux of it. It's not asking companies to do anything they shouldn't have already been doing if they were conscious about security.

The problem is it's been blown completely out of proportion to a point where by son's child minder sent out letters asking for our permission to contact us if our child is unwell (Of course she should - that isn't unsolicited contact. She was already covered!).

It's absolutely not a small cost. It cost the last startup I worked for around two weeks of development time, plus in many cases it prevents us (or adds massive restrictions) on collecting contact information from leads.

It has certainly affected the bottom line of companies like Facebook and Google, but they can afford to take the hit, not all startups can.

I'm not really disagree that companies "should" do it. But I'd argue one of the many reasons we have a shortage of big tech in the EU is excessive regulation restricting our ability to scale.

Protecting your customer's privacy is already a "cost and restriction" regardless of where you live; is this how you feel about all the regulation you have to conform to if you're processing payments?

Really I would prefer the payment system was robust enough that it would do no more harm than publishing your past shopping lists but that is a separate topic.

That has always frustrated me - we have cryptographic signatures. An order should involve only an invoice signed by the end user, the merchant checking it vs your public key and then submission to the credit card processor.

Even if done with "black box calculator functions" to the end user it should be layman usable.

It's bad for US tech because apparently US tech companies do not understand what privacy is and why people deserve to have it.

It applies to everyone who wants to serve EU customers.

As for startups: depending on what kind of personal data you are collecting, being GDPR complicit shouldn't take more than a day.

If it takes longer you are building a business around personal data, and I think you should know your stuff (not just GDPR, but also what kind of data you are collecting and why).

> being GDPR complicit shouldn't take more than a day.

either you're overly optimistic, or you have some 100x rock star doing the impl. because it took over 1 year to implement all of the GDPR required features for me, and we don't even store that much private data!

> If it takes longer you are building a business around personal data, and I think you should know your stuff (not just GDPR, but also what kind of data you are collecting and why).

And you should probably pause and ask whether your proposed business will provide a net benefit to the world, or if it's just an attempt to make money regardless of the consequences to society.

Not to say there aren't any worthwhile businesses to be created around personal data, but experience suggests that some skepticism is in order.

The US saw this with banking regulation after the great recession. Big banks could afford to make it work, and small local banks got the worst of it.

Is that how we are planning on fixing the EU budget?

How does Google Legal Team allow such restrictive clauses in their contracts? https://en.m.wikipedia.org/wiki/Dunning–Kruger_effect

Excellent news! I'm quite delighted. Stringent punishment should be imposed on those thugs systematically looting data of uninitiated usrs.

One makes the law and then punish if somebody doesn't follow it.

It seems EU is digging laws to earn money from American companies.

It's very weird when EU punishes someone by digging up their past and without looking into oneself of the horrible atrocities one have done.

While in this case, it seems to make sense to say we aren't responsible for what's done in past.

> It's very weird when EU punishes someone by digging up their past and without looking into oneself of the horrible atrocities one have done.

What does this mean? Who is "one" here?

What I mean to say is, EU is looking at tech giants past and fining billions.

But if one looks at the European countries history, they have mostly looted from various other countries.

It's seems completely fine for them to look up all the bad practices done by google.(where no human life is lost)

One should also look at what their countries have done in past and pay the affected countries for their wrong doing.

But in these case they seem to say we aren't responsible for what our ancestors have done.

What I mean is, It's fine if google have done something wrong in the past.

Layout the rules now, if they cross it, then fine them.

Now, I think this is exploiting power, just because they can.

I don't know, I see the super state that the EU wants to become as scary as the super tech company people fear in Google. Also, making it hard to change browsers is not the same as prohibiting changing browsers. Some things are hard to change in Linux too, but I am sure for different reasons that are the result of how they pile on top of each other. The EU could use a cash infusion though given its current economic state.

For starters, this fine isn’t about browsers, it’s about AdSense. Apart from that, we can discuss the pros and cons of multinational treaty cooperations until we’re blue in the face but at the very least the EU in principle follows a democratic postulate, meaning that its citizens have decision power. Google is fundamentally unaccountable to anybody but its largest shareholders. If you fear democratically steered treaty unions more than unaccountable multinational mega-corporations, you’re not paying attention.

I am not as optimistic on the EU as you are. Reading 1984, before 1984, and growing up during the Cold War, definitely has shaped my thoughts on some of this, especially a single state or one-world government. A pan-European state, with one flag, it's own anthem, and the desire for a single army doesn't pass my sniff test of just being a multinational treaty cooperation, or a "democratically steered treaty union" as you write above. It points toward a bigger thing in action of that which some of its proponents oppose in their ideals. Trotsky pushed for a communist, soviet united states of Europe in 1923. As far as AdSense goes, after reading the article a second time, I am not convinced of it being a forced monopoly (Apple iPhones and other options), and I see the fine as protectionist and not under antitrust violation. I see the same protectionism here in the US too. I gave up an iPhone for an Android phone, because I think it gives me more choice to install what I want, to hack away at it, in a way that feels more free to me than when I had an iPhone (back in 2016, maybe it has changed?).

> Trotsky pushed for a communist, soviet united states of Europe in 1923.

Right, but what does this have to do with anything? The only thing in common is that both have “Europe” in the name (and I’m not even sure that was part of Trotsky’s vision). If a union of states scares you, the USA must be your waking nightmare. If you’ve indeed read 1984 you’ll notice that there are literally no parallels between that scenario and the history of the EEC and EU.

The zeitgeist of 1923 during Trotsky's statement, and the idea of unifying Europe, since 1923 was also the year that Paneuropa was published by Coudenhove-Kalergi. I don't read 1984 as a roadmap, or with literal parallels to the EU, but only as a cautionary tales against large super states. It is not too clear how the world arrives at this scenario in the book. Warring is a distraction to keep the public in line. I have lived in other countries, and the USA is not my waking nightmare, since in older age, I am more moderate in my response to things. I don't like labels, but I am more of a free-market anarchist than a socialist, and I am not someone who sees the formation of super states, no matter how you label them, optimistically. I guess living in the US, I would be part of Oceania, and not Eurasia anyway ;)

> Some things are hard to change in Linux too, but I am sure for different reasons that are the result of how they pile on top of each other.

The problem isn't technical debt. It would be a company making billions on something that's "hard to change", and than brush it off as technical debt ;)

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