Alphabet Inc., commonly known as Google, has once again found itself in the crosshairs of European regulators. The European Commission announced on Thursday that it is launching an investigation against Alphabet, suspected of violating the so-called "Digital Market Act."
The company is accused of favoring publications from entities commercially linked to it in search results. Representatives of the Union emphasize that the regulation's primary goal is to protect competition and ensure that smaller content distributors do not unjustly lose their revenue.
The Union has a 12-month window to conclude the investigation. Google could face losing up to 10% of its global sales revenue, which could mean a potential fine of several tens of billions of euros.
It's worth noting that this is not the first significant penalty. In the past year alone, Google has received fines totaling 9.5 billion euros. The latest, from September, amounted to 3 billion euros and concerned unfair favoritism by Google of its own technology and advertising services.
Commentators expect this will worsen relations between the Union and the USA. President Trump commented on previous fines, calling them "discriminatory." The reluctance of the new US administration to comply with local laws by American corporations will undoubtedly resurface if the Union decides that Alphabet indeed broke the law and imposes appropriate penalties.
In the case of the maximum penalty, assuming Alphabet's annual global sales revenue is 400 billion dollars, the fine could amount to as much as 34 billion euros.
At the halfway point of the session, Alphabet is down about 2.5%.
GOOGL.US (H1)
Source: xStation5
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