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Google hit with €1.5B fine from EU over advertising

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Re: Google hit with €1.5B fine from EU over advertising

#301

Post by [deleted] »

AnthonyMouse wrote: post #288
mfoy_ wrote: post #277

Earlier quoted context omitted.

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.

> 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, t…

[deleted]

Re: Google hit with €1.5B fine from EU over advertising

#302

Post by jessriedel »

mfoy_ wrote: post #277
jessriedel wrote: post #248

Earlier quoted context omitted.

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…

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.

Re: Google hit with €1.5B fine from EU over advertising

#303

Post by utopcell »

dmitriid wrote: post #280
utopcell wrote: post #258

Earlier quoted context omitted.

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.)

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 o…

The Google Search page is not a market place and the original argument against Google is absurd. For instance, if I search for "The Art of Computer Programming" on Google, the first result through which I can actually buy the books is Amazon, arguably one of the largest competitors of Google.

I understand the desire of playing Devil's Advocate here, but it's difficult to stomach. Google has been such a force for positive change globally that it's hard to see the EU as the good guys in this case.

Re: Google hit with €1.5B fine from EU over advertising

#304

Post by [deleted] »

faceplanted wrote: post #275
utopcell wrote: post #258

Earlier quoted context omitted.

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.)

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

[deleted]

Re: Google hit with €1.5B fine from EU over advertising

#305

Post by AnthonyMouse »

lovetox wrote: post #291
AnthonyMouse wrote: post #288

Earlier quoted context omitted.

> 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, t…

You are missing the point. Google does not just steal money which we get back with a fine and thats it. It drives competitors out of the market and that causes damage to the economy and is against the interests of the population where they do business. They should make the Managers personally liable. If you think about it 1.5 Billions is laughable for a company like Google, its only money which they have plenty from.…

> Google does not just steal money which we get back with a fine and thats it.

> It drives competitors out of the market and that causes damage to the economy and is against the interests of the population where they do business.

That's the same thing. The harm can be measured in money and a proportional fine imposed. That is no argument for the fine to be proportional to total revenue rather than having any relationship to the harm itself.

> They should make the Managers personally liable.

At which point the "manager" is compensated by the company or its liability insurance for whatever retribution the government takes on them as an individual, and it's still the company paying regardless.

> If you think about it 1.5 Billions is laughable for a company like Google, its only money which they have plenty from. Nothing will change.

I don't know about that. In the US the tech companies used to mostly ignore Washington, until it stopped ignoring them. Now they're some of the biggest spenders on lobbying.

That would take a different form in Europe because the laws are different, but if you're not expecting this to lead to some variant of "money buys influence" you're likely in for a surprise. So it will likely change that at least.

Which is another reason proportionality is important. If preventing a $1M fine is worth spending $1M on lobbying then preventing a series of multi-billion dollar fines is worth...

Re: Google hit with €1.5B fine from EU over advertising

#306

Post by ChuckMcM »

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.

Re: Google hit with €1.5B fine from EU over advertising

#307

Post by zavi »

ChuckMcM wrote: post #306

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 s…

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...

Re: Google hit with €1.5B fine from EU over advertising

#308

Post by Veelox »

squaresmile wrote: post #273
Veelox wrote: post #205

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…

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

Re: Google hit with €1.5B fine from EU over advertising

#310

Post by matt4077 »

adventured wrote: post #156
hopler wrote: post #119

Earlier quoted context omitted.

> 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,…

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.
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