The EU Google Dust Up: The Ad Business
July 3, 2016
I read “EU turns to Google’s Ad Business in Antitrust Probe.” Poor Alphabet Google. The company wants to focus, change transportation, and reduce costs by embracing smart software. The nitpickers in the EU continue to find fault with one of Sillycon Valley’s most cherished institutions. The problem this time appears to be advertising.
The write up reports (after one participates in a somewhat silly survey before displaying the write up):
Google is set to be hit with a third set of antitrust charges by the European Union – this time against its advertising business.
What’s the regulated beef? I learned:
investigators are taking steps to formalize their accusations by asking companies to remove confidential material from evidence that supports claims Google abuses its dominance in online advertising. If found guilty of breaking EU competition law, Google could face a maximum fine of 10% of its annual revenue per infringement.
Alphabet Google, despite the company’s best efforts over the last decade or so, generates about 90 percent of its $70 billion in revenue from advertising. A fine would certainly be an interesting number when converted to the super currency, the euro.
My thought is that the Alphabet Google outfit is misunderstood. Advertising depends on people who want to use a free online search system. The advertisers pay the Alphabet Google thing to put messages in front of users. Europe tried and failed to create a Google killer. The Qwant service is chugging along but with less and less spring in its step. The Exalead system, believe it or not, is online, but does not seem to be too popular here in rural Kentucky.
I almost feel sorry for the EU. Alphabet Google should be okay, but if the company finds itself having to pay out billions to keep regulators happy, there will be less fun in the Googleplex.
Stephen E Arnold, July 3, 2016
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