The problem is businesses may take it as a signal that the EU is against foreign businesses rather than against monopolistic practices, in which case the thing being deterred is doing business in the EU rather than monopolistic practices. To show otherwise they would have to levy equally large fines against local businesses engaged in the same sort of practices, which they haven't and likely won't.
If they really wanted to signal discouragement of monopolistic behavior rather than a cash grab they would be ordering specific conduct rather than excessive fines. For example, if the issue is that they promoted Google Chrome in an unacceptable way, prohibit them from distributing Google Chrome in the EU for five years. And then do the same thing to Microsoft just to be even-handed, because they're still bundling their browser with Windows. And likewise with Apple and Safari.
Let everyone use Firefox for five years and see how much browser bundling happens after that.
And if that actually restores competition then you don't need a five billion dollar fine.
That's basic proportionality.
That is entirely tautological. It omits the reasoning under which that spectacular amount of irreparable damages have actually occurred to consumers.
"They have a lot of money and we would like to have that" is not a valid method of calculating damages.
the fine has been calculated on the basis of the value of Google's revenue from search advertising services on Android devices in the EEA.
In other words, Google had an unfair advantage for search on android devices and leveraged that into revenue. The fine is a percentage of that ill-gotten revenue.
There’s an official guideline for calculating damages when anticompetitive behavior is found: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52...
"They have a lot of money and we would like to have that."
The actual "damages" have nothing to do with their total revenue, only the revenue incident to the behavior in question, which is an independent value and not a percentage of total revenue.
For example, if they improve their search engine which causes more people to use it, it doesn't change the actual amount of damage from separate actions -- it may even reduce it by transitioning some of the defaulted users into users who would make an affirmative choice in their favor -- but it would have increased the amount of the fine when calculated as a percentage of revenue because it would have increased their total revenue.
If the revenue related to wrong doing is in the billions and the harm is in the thousands, attempting to prohibit the conduct instead of imposing a small tax and using the money to compensate the victims is obviously a large dead-weight economic loss.
You do understand that doing that would probably cost those companies (and everyone else) a lot more?
We only want a level playing field. Giving companies a real fine is just a way to make sure the board and the shareholders actually gets the message ;-)
It's punishment. If somebody wants it then somebody has a perverse incentive.
> You do understand that doing that would probably cost those companies (and everyone else) a lot more?
Exactly. You actually punish them, in the way directly contrary the the goal they were trying to achieve with their bad behavior, without suspiciously enriching yourselves in a way that calls your true motives into question.
> We only want a level playing field. Giving companies a real fine is just a way to make sure the board and the shareholders actually gets the message ;-)
But what message are they getting?
It's not as if there is a clear roadmap for how to avoid this sort of thing. Antitrust laws are super vague and prohibit a wide variety of common business practices, to make it effective to use them against powerful nefarious entities with many lawyers. The theory is that the government will only use them against bad actors. But if the government considers you a bad actor just because you're a foreign company, what are you supposed to do then?
Most foreign companies aren't considered bad actors.
We are talking about 1) the old Microsoft here - definitely a bad actor - getting rid of it seems to have been refreshing even for Microsoft shareholders.
- 2) Google, a company we many of us loved at some point but who might now be in need of some refreshing at least in some areas.
Google wasn't considered a bad actor until then they were.
> the old Microsoft here - definitely a bad actor - getting rid of it seems to have been refreshing even for Microsoft shareholders.
The old Microsoft deserved everything they got and then some. But even then, it would have been nice for the penalties to be more "actually effective in increasing competition in PC desktop operating systems" and less "suspiciously convenient transfer of large sums of money."
The alternative (where they are considered a bad actor before they were) seems a lot worse ;-)
I think EU might even have cut them a good slack here based on their previous status as good guys.
> and less "suspiciously convenient transfer of large sums of money."
In a EU perspective I think we'll find this doesn't matter much to them.
Massive fines discourage monopolistic behavior, if nothing else.