Google has complied with the recommendations of the European Commission. The company is doing this by separating with Alphabet, which is the European shopping unit of the company. With this separation, it offers a fair platform where other competitors can also trade on fairgrounds. At the same time, the separation means that Google has ended an ongoing battle with European regulators who had accused the search engine company from the US of using the Android operating system to conquer online search. A few months ago, Google was slapped with a $2.9B fine after it was determined by the European Commission that Google abusively promoted its services ahead of its competitors. They further set a deadline of 28th September for Google to comply. If the company didn’t comply with the changes, it would be fined 5 percent of its daily revenue until it complied with the recommendations. After Alphabet separation, this means that other rival companies can buy spaces for their products to appear on top search pages. Competitors have always complained about this practice terming it as search monopoly. This, in the long run, hurts the spirit of competitive markets. With the separation, Alphabet will be able to carry on with the appeal.
The company says that every dominant company should be allowed to favor its own products. This opens an opportunity for the European Commission to sue other companies such as Facebook and Amazon. However, the real issue remains to be android. This is an operating system that is offered to manufacturers for free by Google. Users get to download apps from Google services. On its claim, the European Commission has accused Alphabet of acting in bad faith by offering financial incentives to manufacturers who use their search services. This leads to these manufacturers setting Google as the default engine that allows them to search the app store. Research estimates say that alphabet makes approximately 90 percent of their profit from advertising. At the same time, most of the revenue comes from mobile users. Google has come under fire for the last few months. For instance, the company was ordered to appear before a Senate Intelligence Committee on 1st November where the company will brief the Congress on its role in the 2016 elections. The American firm has been requested by the Congress to determine whether its services were used by the Russians to interfere with elections. This has also happened to other internet companies in the US including Facebook and Twitter.
Dil Bole Oberoi
