TOPIC CONTEXT

GOOGLE has been promoting its own comparison shopping service since 2008, which has consistently been giving it a monopoly-like placement when people search for something of interest on the web. As a result of Google's aggressive / selfish tactics, the competing comparison websites tend to only be displayed on page four of a user's search results, effectively denying them a massive audience as the first page attracts 95 percent of all clicks.

THE RULING

Google has now been fined a record of €2.4 billion by the European Union, losing its largest government regulation battle to date. The European Union prosecutors have succeeded on the grounds of google distorting user defined search results in order to disadvantage small scale online shopping services. Google's parent company Alphabet Inc. is required by law to stop its illegal activity within 3 months and give equal opportunity to rival price-comparison services on the internet. If the internet giant does not submit a plan of action to implement the binding order into their search functionality within 2 months, then the European Union will fine Google 5% of its daily revenue!

The European Competition Commissioner Margrethe Vestager announced, "Google’s strategy for its comparison-shopping service wasn’t just about attracting customers by making its product better than those of its rivals and denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services."

THE MARKET

Google's premarket trading price has risen approximately 24 percent over the last 4 quarters, as a result of this ruling by the European Union - it had dropped by 2% almost immediately. For the everyday day-trader this was probably sweet opportunity to rake in a little bit of extra cash. It will probably be even more of an opportunity over the next 3-6 months, as it is all dependent on whether or not Google conforms to the ruling. There is a possible curve ball to all this though, Google could hypothetically try to appeal this ruling. If they do decide this and fail to win, then they would have wasted time on proposing a plan on the implementation of the Europran Union's binding court order. Therefore - their premarket trading price would suffer an even greater decline!

The one thing that is not commonly known is that Google has 2 other very similar on-going cases, and the fact that this case resulted in Google being involved in illegal activity - means that the remain cases could result with the same outcome. These other cases involve, Android mobile-phone software and the AdSense online advertising service. The one unknown factor though, is when those cases will actually be concluded; therefore the risk of Google having their premarket trading price decline even further in the interim, is mitigated significantly.

For everyone cheering that at least some justice has been served to the likes of Google, and therefore a dent in their cash reserve has justly made. The reality is that, Google has a $90 billion cash reserve, so it really isn't even a dent..

SOMETHING FISHY GOING ON?

The one thing that keeps ringing in my head is that Margrethe Vestager has ordered other massive American companies to, "pay-up or else!". For example, she has ordered Apple Inc. to pay the European Union approximately €15 billion in tax advantages; additionally for truck makers with a astounding fine of €3 billion.

Is it me or does this all seem like these is more to this than just, "getting justice", for all the medium and small businesses out there. Is Margrethe Vestager, trying to do the European Union's dirty work in tapping into the USA's largest most successful companies? Transatlantic tensions are already on fire after the Republican President Donald Trump’s decision to pull the United States out of the Paris climate accord, adding to concerns over global trade.

Seems like something else is going on here, maybe this is actually an arm wrestle match between the U.S.A and the European Union!

Thank you for reading!

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The Dajboz

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