Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

The EU fines Google – What's next?

Published 28/06/2017, 13:18
Updated 28/06/2017, 13:18
© Reuters.

© Reuters.

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.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.