Google’s appeal against EU record £3.8bn fine begins – how did we get here?

Published

3 years ago

September 21, 2021

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Three years after receiving a record fine from the European Commission alongside an order to stop abusing its control of the Android operating system, Google is set to have its day in court.

Back in 2018 the company was fined €4.34bn (£3.8bn) for forcing phone makers to pre-install apps including Google Search and Chrome to the exclusion of other search engines and web browsers.

The fine was a fraction of the €116bn (£99bn) parent company Alphabet recorded in revenues that year, but the real cost to the company was the threat to its future income if smartphones landed in consumers’ hands without Google apps already installed.

Google’s five-day appeal against the decision is being heard at European Court of Justice in Luxembourg, where the company hopes to have the Commission’s decision annulled in its entirety.

A failure to do so could completely reshape the smartphone landscape, but other challenges targeting Google inside the US pose a far more significant risk to the company and could lead to the search giant being broken up into several smaller businesses.

Breaking up monopolies

While there are an over-abundance of comparisons between the oil industry of the late 19th century and the tech industry of today, the slow movement of regulators is one of the most striking similarities.

It was in 1890 that US Congress passed a law to tackle the monopolies which had sprung up over the preceding half century, but it took more than three decades for that law to be used to break up Standard Oil, a company which by 1904 controlled more than 90% of oil production in America.

Standard Oil’s business excelled due to its innovations in refining oil, but also because the company had rapaciously acquired rivals and used its commercial heft to strike deals with railroad companies (themselves a target for early antitrust action) at discounted rates which the remaining oil businesses could not compete with.

In a landmark ruling in 1911, the US Supreme Court upheld that Standard Oil was an illegal monopoly and ordered it to be broken up into 34 independent companies. Though that power is not available to the European Commission, there is a growing movement in the US calling for similar actions to be taken against tech giants whom some believe are guilty of the same anticompetitive practices.

Modern antitrust law

Google is a very different company to Standard Oil, but the alleged unfairness of its practices – using its control of Android to force phone manufacturers who want to include the Google Play app store on their phones to also pre-install Google Search and Chrome – follows the same model of undermining rivals.

The investigation into Google coercing phone manufacturers formally began in 2015, although the Commission made its first enquiries about the company’s practices in 2013 when an association of Google’s rivals calling itself FairSearch lodged a complaint against its business practices.

The ruling came three years later in 2018 and now, three years later, Google’s appeal has reached the European Court of Justice. Thomas Vinje, counsel to FairSearch and partner at law firm Clifford Chance, told Sky News he expected there could be another appeal after the hearing in Luxembourg.

“Antitrust enforcement is not, on its own at least, sufficiently robust, sufficiently effective, to be able to address these really extraordinary concerns. I’m not sure the world has ever faced a situation where there is such a concentration of power in such a central element of today’s economy, and antitrust law is not up to the task,” he said.

“That is largely because they’re complex cases,” Mr Vinje explained.

“They’re more complex than rail roads or oil distribution – I’m not saying those are simple – but the issues faced in Big Tech today are a hell of a lot more complicated. So there is a hell of a lot more room for obfuscation… and dragging things out.

“So by virtue of the completely appropriate rights that defendants have in these cases, the cases just take too long.”

What is Google’s response and appeal?

Google, which claims the most popular search term on rival search engines such as Bing is the word “Google” itself and which controls more than 90% of the market for web searches, disputes the Commission’s arguments about its dominance, although that won’t feature prominently in its arguments next week.

In a news briefing ahead of the hearing, the company explained to journalists that it believes a lot has changed in the years since the Commission issued its decision.

Key to Google’s appeal is the argument that its control ensures Android is a platform which can run across millions of smart devices made by different manufacturers, increasing the economic benefits for developers – including rival web browser makers such as Opera, which is supporting Google’s appeal – and ultimately consumers.

Google will note that a revenue sharing agreement it had with phone manufacturers and mobile network operators, cited as an illegal contractual restriction by the Commission, ended in 2014.

The company also strongly disputes the way that the Commission calculated the €4.34bn (£3.8bn) fine, something the Commission said was “calculated on the basis of the value of Google’s revenue from search advertising services on Android devices” inside the European Economic Area.

What is the threat in the US?

Even if Google succeeds in getting the Commission’s decision annulled or amended, it faces three more challenges in the US which are backed by severe powers to tackle monopolies.

The first complaint was filed last October in a case led by the Trump administration’s Department of Justice and joined by 11 states – though with apparent bipartisan support – charging Alphabet with “unlawfully maintaining monopolies in the markets for general search services”.

It followed a congressional report which accused Amazon, Apple, Facebook and Google of monopolising the digital market and recommended antitrust laws be used to break them up.

Two more cases were brought against Google in December.

One from the attorneys general of 35 states accuses the company of anticompetitive practices in order to retain its dominance in search, while another filed by the attorneys general from 10 states focuses on the company’s monopoly power in digital advertising markets.

Google has denied engaging in anticompetitive practices.

US

Donald Trump can seek dismissal of hush money case as sentencing postponed

Published

2 days ago

November 22, 2024

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Donald Trump can seek dismissal of hush money case as sentencing postponed

A judge has postponed sentencing in Donald Trump’s hush money case and granted permission for his lawyers to seek a dismissal.

It comes after the Manhattan district attorney said he wouldn’t oppose a motion to delay the sentencing.

In May, a New York jury found Trump guilty of 34 counts of falsifying business records to commit election fraud.

It was the first time a US president had been convicted of or charged with a criminal offence.

Trump had tried to cover up “hush money” payments to a porn star in the days before the 2016 election.

When Stormy Daniels‘ claims of a sexual liaison threatened to upend his presidential campaign, Trump directed his lawyer to pay $130,000 (£102,000) to keep her quiet.

The payment buried the story and he later won the presidency.

Trump denied the charges and said the case was politically motivated. He also denied the sexual encounter took place.

New York State Supreme Court Justice Juan Merchan today delayed the sentencing, which had been due to take place on Tuesday.

The office of district attorney Alvin Bragg had asked the judge to postpone all proceedings until Trump finishes his four-year presidency, which starts on 20 January.

Trump’s lawyers say the case should be dismissed because it will create “unconstitutional impediments” to his ability to govern.

Responding to Friday’s decision, a Trump campaign spokesman said: “The American People have issued a mandate to return him to office and dispose of all remnants of the Witch Hunt cases.”

The judge set a 2 December deadline for Trump’s lawyers to file their motion, while prosecutors have until 9 December to respond.

He did not set a new date for sentencing or indicate when he would rule on any motion to throw out the case.

Even before Trump’s win in this month’s election, experts said a jail term was unlikely and a fine or probation more probable.

But his resounding victory over Kamala Harris made the prospect of time behind bars or probation even less likely.

Trump, 78, was also charged last year in three other cases.

One involved him keeping classified documents after he left office and the other two centre on alleged efforts to overturn his 2020 election loss.

A Florida judge dismissed the documents case in July, the Georgia election case is in limbo, and the Justice Department is expected to wind down the federal election case as it has a policy of not prosecuting a sitting president.

Trump last week nominated his lawyers in the hush money case, Todd Blanche and Emil Bove, for senior roles in the Justice department.

When he re-enters the White House, Trump will also have the power to shut down the Georgia and New York cases.

US

Pam Bondi: Key proponent of Trump’s false 2020 election claims set to head justice department after Gaetz withdrawal

Published

2 days ago

November 22, 2024

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Pam Bondi: Key proponent of Trump's false 2020 election claims set to head justice department after Gaetz withdrawal

Donald Trump has pledged for years to surround himself with ultra-loyalists who can mould his government to his vision without barriers.

That’s precisely why he picked Matt Gaetz. Now he’s out, Pam Bondi is in and she’s equally loyal.

Gaetz was uniquely unpopular on Capitol Hill but ultra-MAGA and ultra-loyal to the president-elect.

He was chosen by the president-elect to do his bidding inside the Justice Department as attorney general.

Critics called his pick “a red alert moment for democracy” and the man a “gonzo agent of chaos” – language that would surely only affirm Trump’s decision in his own proudly disruptive mind.

If it wasn’t for the fact that the president-elect is himself a convicted felon, and a man found liable in a civil court of his own sexual offences, the prospect of Gaetz, with all his baggage, making it through the nomination process would have seemed remote.

But Donald Trump’s return to the White House suggested anything is possible.

And so, beyond his loyalty, Gaetz was Trump’s test for his foot soldiers on Capitol Hill. How loyal were they? Would they wave through anyone he appointed?

It turns out that Gaetz, and the storm around his private life, was too much for a proportion of them.

At least five Senate Republicans were flatly against Matt Gaetz’s confirmation. We understand that they communicated to other senators and those close to Trump that they were unlikely to be swayed.

They included the Republican old guard like Senator Mitch McConnell.

Beyond the hard “no” senators, there were between 20 and 30 other Republicans who were very uncomfortable about having to vote for Gaetz on the Senate floor.

The key question is whether Gaetz was Trump’s intentional wild card crazy choice that he knew, deep down, would probably never fly.

Was Gaetz the candidate he had accepted would be vetoed by senators – who would then feel compelled to wave the rest of his nominees through?

Will Pete Hegseth’s alleged sexual impropriety concern them as they consider the suitability of the former Fox News host and army major to run the Department of Defence?

What about Tulsi Gabbard, the candidate Russian state TV calls ‘our girl’, and the appropriateness of her running America’s intelligence agencies?

These are all appointments that the politicians on Capitol Hill must consider and confirm in the weeks ahead.

We don’t yet know who Trump will choose to direct the FBI.

There are some names being floated which will make the establishment of Washington shudder but then that’s precisely why Trump was elected. He is the disrupter. He said so at every rally, on repeat.

He was quick to pivot to another name to replace Gaetz.

Bondi is the former attorney general of Florida. Professionally she is in a different league to Gaetz. She’s been a tough prosecutor, with a no-nonsense reputation.

She is also among the most loyal of loyalists. Her attachment to Trump stretches way back.

I first came across her in Philadelphia in November 2020 when she was among Trump surrogates claiming the election back then had been stolen from them by Joe Biden and the Democrats.

She was a key proponent of the false claims the election had been rigged and Trump was the rightful winner.

The court cases concluding that was all nonsense didn’t seem to convince her.

Now she is poised to head up the Department of Justice as the country’s top law enforcement official.

US

Donald Trump on day one: Pace of change ‘like nothing you’ve seen in history’, warns campaign official

Published

3 days ago

November 21, 2024

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Within hours of taking office, president-elect Donald Trump plans to begin rolling out policies including large-scale deportations, according to his transition team.

Sky News partner network NBC News has spoken with more than half a dozen people familiar with the executive orders that his team plans to enact.

One campaign official said changes are expected at a pace that is “like nothing you’ve seen in history”, to signal a dramatic break from President Joe Biden’s administration.

Mr Trump is preparing on day one to overturn specific policies put in place by Mr Biden. Among the measures, reported by sources close to the transition team, are:

• The speedy and large-scale deportations of illegal immigrants

• Ending travel reimbursement for military members seeking abortion care

• Restricting transgender service members’ access to gender-affirming care

But much of the first day is likely to focus on stopping illegal immigration – the centrepiece of Trump’s candidacy. He is expected to sign up to five executive orders aimed at dealing with that issue alone after he is sworn in on 20 January.

“There will without question be a lot of movement quickly, likely day one, on the immigration front,” a top Trump ally said.

“There will be a push to make a huge early show and assert himself to show his campaign promises were not hollow.”

But Mr Trump’s campaign pledges also could be difficult to implement.

Deporting people on the scale he wants will be a logistical challenge that could take years. Questions also remain about promised tax cuts.

Meanwhile, his pledge to end the war between Russia and Ukraine in just 24 hours would be near impossible.

Even so, advisers based at Mr Trump’s Mar-a-Lago resort or at nearby offices in West Palm Beach, Florida, are reportedly strategising about ending the wars in Ukraine and the Middle East.

Following his decisive victory on 5 November, the president-elect has moved swiftly to build a cabinet and senior White House team.

As of Thursday, he had selected more than 30 people for senior positions in his administration, compared with just three at a similar point in his 2016 transition.

Stephen Moore, a senior economic adviser in Mr Trump’s campaign, told NBC News: “The thing to realise is Trump is no dummy.

“He knows he’s got two to three years at most to get anything done. And then he becomes a lame duck and we start talking about [the presidential election in] 2028.”