How To Really Hurt Google, Europe-Style
David Barroux

-Analysis-

PARIS — There are always worse things in life than money troubles. The record $2.7-billion fine that the European Commission slapped on Google for breaching competition rules is a major financial blow for the company. But for a firm making billions of dollars like Google, the mega-penalty isn't the main problem.

It's never enjoyable to be punished financially for past mistakes. But if the incriminated practices have allowed the company to establish its domination — in other words, if the harm has already been done — such a sanction, no matter how heavy, is hardly insurmountable. For the Californian technology giant, the real trouble isn't the fine for for past mistakes — it's what it could mean for the future.

Implicit in what the European Commission just did is that Google cannot take advantage of its power as a search engine to develop the rest of its activities. The decision is reminiscent of the one made in 2008 that forced Microsoft to open the door to other Internet browsers beyond its own Internet Explorer. For Google now, this is the beginning of an imposition of "neutrality in search." The folks in Mountain View know their company is now under surveillance.

Though shaken, Google is still on very strong footing.

The European Commission didn't go as far as imposing a functional separation between the Google search engine and the other activities of the group. But should there be any further abuses, this is the "nuclear option" that might very well be used one day against the American company, which has tried to portray itself in this showdown as the victim of a geopolitical power struggle between the U.S. and the European Union.

Still, though shaken, Google is still on very strong footing. The company can look for ways to modify its practices that won't cripple its business. But it must also bear in mind that if, in this present case, it took the European Commission seven long years to reach a verdict, it now has legal weapons and arguments that allow it to strike more quickly and more powerfully if abusive practices are repeated. For the billionaires back in California, that's what hurts the most.

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