Google launches fightback against record $4 billion fine

The company was fined €2.4 billion in June. Photo / Bloomberg

Google will launch a fightback against Brussels this week when the company lodges an appeal against its record monopoly abuse fine.

The internet giant is expected to file the response to the European Commission's €2.4 billion ($4b) penalty on Monday (UK time), the deadline for submitting an appeal.

Google, which is facing further multi-billion euro fines in the coming months over its Android software and online advertising network, has been weighing up a challenge since it was fined in June and the company's hand was strengthened last week when Intel won an appeal over its own €1.1b (($1.82b) fine for breaking competition law.

Google's appeal will extend the seven-year tussle between the company and the EU over allegations it exploited the dominance of its search engine to promote its online shopping service at the expense of small price comparison websites.

EU competition commissioner Margrethe Vestager has been a thorn in the side of the company, carrying out three parallel antitrust probes, as well as pursuing fellow tech multinationals Apple, Facebook and Qualcomm.

Her demands that tech companies fork out billions in fines and unpaid taxes have led US politicians to accuse Brussels of bias and protectionism.

The €2.4b fine in June was the biggest for breaking competition law in the EU's history, eclipsing the €1.1b Intel was ordered to pay eight years ago. Swallowing it led Google's parent company Alphabet to report a 30 per cent fall in quarterly profits in July.

Vestager said that by prominently displaying links to its shopping service in Google results and relegating rival price comparison sites, it had illegally exploited the 90 per cent market share enjoyed by its search engine to gain a leg up in online shopping.

Price comparison websites are now lining up to sue the company and Google has also been ordered to change its search results or face fines worth 5 per cent of its turnover. It submitted its plans in August and must implement them by the end of this month.

Last week, Vestager said Google's plans pointed "in the very right direction" but the company will remain on parole for years, with a team of tech experts monitoring its compliance with the order.

Fines in other competition cases related to the Android smartphone operating system and its AdSense advertising network are expected later this year.

The company has aimed to appear co-operative with the commission, so far only saying that it "respectfully disagrees" with the fine. It has been weighing up the benefits of an appeal in the knowledge that it may further sour relations with Brussels.

But Google will have been emboldened last week when the European Court of Justice (ECJ) ordered that Intel's 2009 fine be reviewed by a lower court.

Intel, which was fined by the commission in 2009 for bullying computer manufacturers into buying all their microprocessors from the company instead of rival group AMD, had lost its original appeal against the fine at the EU's General Court.

In a landmark decision the ECJ said the court had ignored a central aspect of the commission's decision and told it to revisit the fine.

While only related to the Intel case, the decision was seen as a rare victory for Silicon Valley against Brussels.

Apple has already appealed the commission's demand that Ireland claw back €12b in allegedly unpaid taxes from the company, and Qualcomm is being investigated over claims it paid Apple to use its broadband chips in 2011.

In May, Facebook was fined €110m for misleading EU regulators when they approved its US$19b (£14.4b) acquisition of WhatsApp in 2014.

A Google spokesman declined to comment.