Investing.com - The EU has hit Google with a record 2.7 billion dollar antitrust fine for abusing its dominance in search. The European Commission ended its seven-year competition investigation on Tuesday, concluding that the search engine had abused its near-monopoly in online search to give an illegal advantage to its own shopping service.
Alphabet (NASDAQ:GOOGL)'s stock dropped 2.5 percent to 948 dollars on the news, and the company now trades 6 percent lower than its 52 week high of 1008 dollars. The 2.7 billion dollar fine amounts to about a third of Alphabet's revenue in Europe and half of its global net income for the first quarter of 2017.
The question now is – what's next for the tech giant?
Unfortunately, this ruling doesn't mark the end of Alphabet's trouble with the law. The European commission has two other cases pending against Google. One probes Google's use of its android platform, the other examines Google's AdSense – its online advertising system. Being forced to drastically change the way it does business in Europe could have a detrimental effect on the company's revenues and earnings.
Furthermore, shopping comparison websites are allowed to sue Google for damages in national courts, meaning more lawsuits and more fines to pay are entirely possible.
That being said, the fine will not affect Alphabet financially. Its latest earnings report showed its cash reserve keeps on growing, and now amounts to over $92 billion dollars in cash and equivalents. Alphabet is still unrivaled in its field, and while it may need to make adjustments, the company has proven its ability to come up with alternative solutions while maximizing profits. Alphabet is one of the cheapest tech giants around, and should be still considered regardless of impending EU antitrust cases.