When Eric Schmidt, Google’s executive chairman, met the E.U. Competition Commissioner Margrethe Vestager in early March, he knew he couldn’t just rely on his charm, like he had done with her predecessor, Joaquín Almunia.
Eight employees, most of them engineers, accompanied Mr. Schmidt on his trip in an attempt to win over the commissioner with facts.
The trip was to no avail. Europe’s foremost competition watchdog announced last month that her department now has enough evidence that Google has been abusing its dominant position in the search engine market to begin an anti-trust investigation.
The inquiry will also look into whether or not the Internet giant has used its Android mobile software to push its own mobile apps into the market at the expense of competitors.
In the worst case scenario, Google will face a penalty of up to 10 percent of its turnover, which amounted to $66 billion (€59.3 billion) in 2014.
A fine of $6.6 billion would be a new record, by far breaking the current record of €1.06 billion ($1.79 billion) that chip manufacturer Intel had to fork out. But Google could easily pay the penalty from its coffers, which are lined with around $65 billion.
What is much more of a threat than the fine is the possibility that the E.U. investigations and other legal actions might constrain the huge company’s competitive carte-blanche.
E.U. penalties can be a good indicator that companies are either neck-deep in economic trouble or just about to slip into turmoil. Before Google, that held true for Microsoft and Intel.