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Google will appeal €2.9bn EU fine

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Google has a monopoly in 13 out of the 14 top commercial functions of the web

Wow. It's helpful to be reminded of things like that

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Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

Google has a contestable monopoly in 13 out of the 14 top commercial functions of the web

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Coat

Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

Would be nice if we could get a citation for that number...

... if only to prevent accusations of anal statistical extraction from the Google faithful...

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Happy

Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

I'm kind of wondering what are the "14 top commercial functions of the web"?

And which one is not owned by Google? Cloud computing, owned by Amazon? Online shopping, owned by Amazon? Online payments, owned by... credit card companies? Bitcoin?

Extortion, owned by Oracle?

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Anonymous Coward

Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

Google has a contestable monopoly

That is IRRELEVANT in Eu (and for now UK) competition law. The Eu competition law is not based around the concept of monopoly or can it be contested or not.

It is based around the concept of "significant market power". Do you have the power to distort the market or not.

1. As a result, it starts to apply long before you have reached 50% and regardless to how much it is contested.

2. One of the key tenets of the Eu competition law is that you cannot use a commercial function in an area where you have significant market power to attain commercial leverage in another area, especially one where you do not. Google has done this countless number of times.

The only reason it has evaded the Eu is that the previous version of the Eu commission as led by Barosso was "business friendly". That would be a polite way to describe a beyond Blair level of scumbagginess. Instead of applying the law and the principles of the Eu it always looked to reach a deal. CETA, TTIP, you name it. That is no longer on the menu. One thing we can thank Brexit for is that the scumbagginess is out of fashion. The knitting lady is applying the law and the law says that you cannot cross-leverage if you are even approaching a monopoly. Something we have all seen Google do on a regular basis.

It is an open and shut case really. So shall be Android after that.

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Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

"Would be nice if we could get a citation for that number..."

you're absolutely right for two separate reasons:

a) you want to get your facts right, when you're being challenged

b) you don't want to ruin credibility by spreading 'fake news'

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Terminator

Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

"It is based around the concept of 'significant market power'. Do you have the power to distort the market or not."

Well, I don't think it should be ILLEGAL to "have the power". Wielding it unfairly, however, SHOULD be punished as hard as possible.

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Anonymous Coward

Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

Well, I don't think it should be ILLEGAL to "have the power". Wielding it unfairly, however, SHOULD be punished as hard as possible.

Which is exactly the commission's case. Using the power in search to promote a shopping service.

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Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

"One thing we can thank Brexit for is that the scumbagginess is out of fashion."

You really, REALLY, have not been watching UK politics then...

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Re: Google has a monopoly in 13 out of the 14 top commercial functions of the web

@AC

"It is based around the concept of "significant market power". Do you have the power to distort the market or not."

And such is the problem of success. Google is a successful company. They are successful by not sitting on the one thing they already do but by also branching out and developing further. By the mere problem of being successful they have the ability to look to doing something else and hire the best people + infrastructure and absorb the loss if it fails.

So how can Google do anything without the success of its name and financial status almost certainly giving it significant market power?

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Cor! a fine with a sting

for once.

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It's all about the money...

On one end most governments want to privatize certain aspects because it'll be cheaper on them. Sure they're 'selling' it as "competition will make things cheaper" but surely they're not that stupid? Not to mention that history proved them wrong there. But then again...

See, that's the one thing I don't get: everyone who has a basic understanding of economics will realize that a monopoly is basically the #1 goal to go for: it means you're more successful than the competitors. Best of all this is often achievable without any dirty tactics. But then suddenly the politicians realize that this isn't what they wanted. Which is strange because, as mentioned, in an open market this is the highest goal to achieve. Surely it should be obvious that this is what companies will go fot? But apparently not and so actions are required to "fix things".

But, uhm, first of all: how exactly is fining Google going to change anything?

Second: couldn't they have seen this coming for a long time already?

Sorry, but all I can see is that the EU needs money (read into it and you'll know why) and this is simply an easy way to do it. As said: what will this achieve or change anyway? Where is that money going? Isn't it ironic that right now the Southern European nations are in some heavy debts and the whole continent is somewhat struggling to get that balanced out? Coincidence? I have my doubts....

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LDS
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"#1 goal to go for: it means you're more successful than the competitors"

The law doesn't punish you for being more successful than competitors (Microsoft was as well, wasn't it?), the law punish you only when you use your monopoly power to hinder competition and damage consumers. As soon as you reach a "dominant position", new rules apply.

It's not a new idea - read the 1890 Sherman Act...

Company don't like hefty fines - they may hit executives compensations and stock value.... a €1M fine may be pocket money, a €3B ones begins to sting...

This is has nothing to do with some countries debt. The proposed new tax rules for digital companies may have, but not this, although a healthy economy generates more revenues than a single behemoth able to sneak money around.

Anyway, look also at the US debt... you can print dollars, but there's a limit to that also.... and remember who owns a lot of the US debt...

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But, uhm, first of all: how exactly is fining Google going to change anything?

Well, they're going to have to change the way they do their business at least. In fact, they already agreed to do that, appeal or no appeal. Which indicates that the goal of the appeal is more to reduce the fine or avoid further damage lawsuits than to reverse the decision.

Second: couldn't they have seen this coming for a long time already?

People have been complaining about this for about ten years already. What took so long is that the previous competition commissioner tried to solve this without a big fine, and that took about five years. Then they had to start over from the beginning.

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Regarding the question of "couldn't they have seen this coming for a long time already?"...

If I can make €3bn profit before getting a €2.9bn fine then it makes sense to carry on. In the majority of cases they will seek to make hay whilst the sun shines and take the consequences somewhere down the road. They'll want to contest the fine in order to get it lower as open acceptance would likely lead to a higher fine the next time they infringe. Such fines may seem large but they are just a cost of doing business.

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Interested in why the downvoter couldn't elaborate on their take. You may not like the theory but it is pretty much how big business operates. Oil companies and spills etc. Manufacturers and low paid 3rd World workers etc.

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Anonymous Coward

Hmm, Intel back in court eh ? I do hope the EU realise they didn't fine them enough after what they did to AMD and double the original penalty.

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Anonymous Coward

Where is the European:

Apple

Microsoft

Google

Cisco

Oracle

Amazon

IBM

Etc,Etc

All very good whining about Google but all that means is it just opens the door more for Microsoft rather than a non existent European tech competitor. Europe is just nowhere to be seen in these sort of IT/Tech services.

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LDS
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Go to the EU competition site and you'll see EU companies are routinely fined as well:

http://ec.europa.eu/competition/index_en.html

You named only IT companies, and most of them happens to be from US.

For the matter, it's also investigating on Bayer (a very large EU company...) acquiring Monsanto (a US one), to avoid the creation of a monopolistic entity.

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IT Angle

>You named only IT companies, and most of them happens to be from US.

That's because I'm only discussing IT companies and the IT sector and not the crop science agro businesses. FYI Syngenta is in the process of being purchased by the Chinese, I do have an active interest in that area as I used to work for ICI and hold some Syngenta shares, which I must say have done fantastically well.

My point is the US dominance of the IT sector and Europe's failure to compete successfully against them.

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Re: My point is the US dominance of the IT sector and Europe's failure to compete successfully against them.

A good area of investigation.

From memory, a key factor attributed to the dominance of the US was a large protected (from non-US companies) home market that enabled companies to gain critical mass. Europe's response was to create the Single Market, with the idea, for example, a UK company's home market would be 500+m instead of 60+m people.

If we compare the 1960's~80's to more recent times, we see that instead of investing in UK high tech R&D eg. Concorde and the APT, the government has been encouraging others to do their high tech R&D in the UK eg. Google and driverless cars. Only time will tell if this works, however, if we look at the motor industry where M.Thatcher's industry advisor changed her policy from "the UK motor industry" to "the motor industry in the UK", I suspect the current approach will be more economically beneficial.

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LDS
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Actually, a lot of "US" IT tech was and is actually created by Europeans - Linux, Pascal, /C#, Python just the top big ones that comes to my mind now. Even Intel owes a lot to Faggin. Or ARM development in England. Without Europe, the US IT sector would be much weaker.

Just, it was easier to start an IT company in the US and reach a larger costumer base speaking the same language, than attempting it in the more fragmented and expensive Europe.

Anyway, this rulings had nothing to do about "Europe failure to compete" - as EU investigates and fines other sectors where Europe has strong companies which have no issue in competing.

It's just EU thinks "big companies are not always right", unlike the United Enterprises of America, where politicians for plain self-interest (lots of money from lobbyists) decided big businesses are always right.

We're happy to have a Margrethe Vestager instead of an Ajit Pai.

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Anonymous Coward

>Or ARM development in England.

ARM is now Japanese owned.

>Actually, a lot of "US" IT tech was and is actually created by Europeans - Linux, Pascal, /C#, Python

These virtually make no money, you cannot run a society on nostalgia as bills have to be paid. Linux is a UNIX clone, an OS invented in the US.

>It's just EU thinks "big companies are not always right"

Unless of course it's German car manufacturers, German chemical companies, German engineering companies, French conglomerates, French banks, French electricity companies etc.

>Without Europe, the US IT sector would be much weaker.

The transistor was invented at Bell Labs, USA.

Without Europe the US we in Europe would be all goose-stepping and speaking German. Not a fact I'm comfortable with but still a fact.

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LDS
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"These virtually make no money,"

Did you mean TurboPascal didn't make money, or C#? RedHat makes no money? Even MS Office leader Simonyi was European, no money from Office? And the list can be very long. Who cares who owns ARM now, who developed it, and who's making lots of money from it?

Nobody is saying US did nothing, but also it used a big source of Europeans to create commercial products. There's nothing negative in it, in many ways it was and it is a win-win situation. Great co-operation between US and Europe can deliver huge benefits.

That's of course doesn't mean megacorps should be allow to ignore the rules wherever they operate, especially when they make life worse for many, not better.

Again, go to the EU antitrust site - you will see EU companies, including German and French ones, are routinely fined when they break the rules. The fact you ignore it doesn't mean it doesn't happen. For example German car makers are under investigation for setting up a cartel. Did you miss the news? Don't read IT news only, it's limiting.

About WWII, it is true US helped greatly to defeat Nazism. It also got a lot German technology, scientists, and technicians, and, for example, went to the Moon using it.... Goddard alone wasn't enough.

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Anonymous Coward

Re: "These virtually make no money,"

>Did you mean TurboPascal didn't make money, or C#? RedHat makes no money?

C another Bell labs invention.

Pascal, first written on a CDC 6000, a US product. Pascal is ancient history and nobody makes any money out of it now.

Red Hat, a US company making loose change out of a UNIX clone.

FYI

https://www.justice.gov/atr/antitrust-case-filings-alpha

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