“We love Google, but we fear Google,” Vodafone CEO Vittorio Colao said during a high-profile debate that Eric Schmidt lost badly to one of the most important Google opponents in Europe. The debate took place at an exclusive Google event last August, attended mainly by Googlers. While that may be seen as just an argument between powerful people manning top companies that affect our daily digital lives, Google’s business in Europe is actually at stake.
The search giant is facing intense scrutiny in Europe in an antitrust case that seemed to leave Google unharmed more than a year ago. But Google is a long way off from reaching a definitive settlement, as more and more companies make their concerns against Google heard. The company might be facing a $6 billion fine in a case that could have lasting damage to its business in the region.
One of the key players at the debate was Mathias Döpfner, CEO of Axel Springer, the largest and most influential media company in Germany. Döpfner last year attacked Google in an open letter to Schmidt in German publication Frankfurter Allgemeine Zeitung with a bold headline that read, “Why We Fear Google.”
This particular detail comes from a massive expose published in Bloomberg Businessweek (hitting newsstands tomorrow) that’s looking into how Google lost the battle for Europe, a region where its search and Android products are each dominant players in their respective businesses.
“Results for the search term ‘iPod’ reveal that thumbnail product pictures guide the visual attention of users to ‘Google Shopping Results’ with 56% of participants clicking into this area. While the ‘alternative search sites’ caught less visual attention and only clicked once, indicating little interest from users.” (ICOMP study) | Image via GigaOM
In short, Google almost escaped the investigation unharmed, as former European Union competition commissioner Joaquin Almunia desperately tried to settle the matter before his term came to an end last fall. In early 2014, Almunia suggested that the third Google settlement proposal would be approved, yet he failed to convince his peers to vote for it.
In the meantime, he was replaced by a more determined Margrethe Vestager, who already announced that the EU will thoroughly look into Google’s business practices in Europe. And unlike Almunia, Vestager is not necessarily looking to compromise. According to documentation received by Bloomberg, the European Commission “intends to set the fine at a level, which will be sufficient to ensure deterrence.”
In addition to paying an enormous fine, Google would have to alter the behavior of its Search product and how it works on computers and mobile devices in the region in order not to harm competitors. Those changes might have other adverse effects on its ad-based bottom line.
The full piece is definitely worth a read (check the source link at the end of this article), as it exposes all the twists and turns in this complex matter.