Google could pay as much as $9 billion in fines in August if found guilty of breaching the EU antitrust rules. The Alphabet’s unit was accused of manipulating internet search results in favor of its shopping service.
The EU regulators are expected to release the results of its seven-year investigation by August this year. According to Reuters, the fine could reach up to 10 percent of the company’s global turnover last year. Google will also be ordered to stop doing its anti-competitive measures, which hurt its rivals and consumers.
The most popular internet search engine in the world tried three times to settle with the European Commission to avoid fines but was rejected by former commissioner Joaquin Almunia. Margrethe Vestager, the current commissioner, is also not willing to settle.
Aside from the shopping case, Google is also facing an allegation that it is blocking rivals from its Android operating system and in online search advertising in its “AdSense for Search” platform. These could also result in huge fines from the EU.
These regulatory risks are affecting investors’ sentiment towards the company. On Friday, CFRA analyst Scott Kessler downgraded Alphabet from “strong buy” to “buy” because the stock is not “compellingly priced.”
“If the EC proceeds with penalties — people are aware of the size of that fine, and that Google has more than enough funds…to cover that. I don’t know that the financial fines would be the most significant negative,” Kessler told CNBC. “I do think that something like that could very well have a chilling effect of Google’s, and Alphabet’s, ability to be more aggressive on a number of different fronts. At the least, that should be a negative,” he added.
The company has so far seen an almost 26 percent rally this year, which exceeded the 9 percent rise of the S&P 500.
Why is the stock market up?
A global pandemic. The President impeached. Raging wildfires across the west coast. Riots throughout major cities. The Olympics cancelled. The...
The biotech sector in Bavaria has strongly developed over the last years
Bavaria has been able to establish itself as a location for biotechnology and innovation in recent decades. However, at an...
How the coronavirus pandemic impacted the German Fintech sector
The coronavirus pandemic has clearly affected the Fintech sector in Germany. However, some of the companies that are currently struggling,...
What’s the problem with the Dow Jones? Maybe it’s overvalued
So far, the Dow Jones has yet to exceed the high of its current advance on August 3rd. Who knows...
Fruitbox Africa: Frankfurt investor and Siemens to create jobs in Ethiopia
The Frankfurt investor Lutz Hartmann and the technology giant Siemens want to invest in Ethiopia. Creating jobs, training young people,...
Featured6 days ago
Qonto registered over €900 million value of transactions on Italian current accounts
Cannabis7 days ago
Cannabis light company to sponsor Italian soccer league teams
Crypto7 days ago
Why are Ethereum fees higher than Bitcoin ones?
Business7 days ago
XRApplied sitting pretty on the precipice of the XR boom