Calls for Breaking Up Tech Giants Grow Louder After EU Hits Google With $1.7 Billion Antitrust Fine

In a move that elevated growing calls for breaking up tech giants, European regulators on Wednesday hit Alphabet's Google with its third antitrust fine in two years--this time, fining the company nearly $1.7 billion.

"Breaking up big tech isn't the only solution, but it's the necessary first step to actually addressing the problem of big tech."
--Matt Stoller, Open Markets Institute

The new penalty comes in response to Google's "illegal practices in search advertising brokering to cement its dominant market position," in violation of European Union (EU) anti-competition rules.

It follows fines of $2.7 billion for Google's online shopping search results in 2017 and $5 billion for its Android mobile operating system and applications last year--bringing the two-year total to more than $9 billion.

"Google is dominant when it comes to online advertising brokerage market, with market shares in Europe of above 70 percent," said Margrethe Vestager, the EU commissioner for competition. "Google abused its dominance to stop websites using brokers other than the AdSense platform."

Former New York attorney general candidate Zephyr Teachout celebrated the penalty. "Europe is cracking down on Google's corrupt business model," she tweeted. "The abuse of power is real. But the tide has changed."

"The U.S. should act too," Teachout said, pointing to Sen. Elizabeth Warren's (D-Mass.) plan to break up tech giants. While unveiling her plan this month, the senator and 2020 presidential candidate charged that companies such as Google, Amazon, and Facebook have " too much power over our economy, our society, and our democracy."

In a series of tweets on Wednesday, Matt Stoller, a fellow at the Open Markets Institute, concurred with Teachout and Warren. "Breaking up big tech isn't the only solution," he said, "but it's the necessary first step to actually addressing the problem of big tech."

Google has been at odds with the EU over antitrust rules for the past decade. As Vestager was investigating Google for antitrust violations in November of 2014, members of the European Parliament voted 384-174 for the European Commission to consider "unbundling search engines from other commercial services."

However, as Stoller noted, Vestager does not agree with Warren's approach to regulating big tech. "When it comes to the very far reaching proposal to split up companies, for us, from a European perspective, that would be a measure of last resort," the EU commissioner said, explaining that she favors antitrust probes and fines to "change the marketplace to make it a fair place."

While the EU's fines targeting Google far outweigh any actions by U.S. regulators, Stoller dimissed the latest penalty as "another useless parking ticket" and suggested that given the company's continued dominance of the digital world, Europe's current rules and penalties "aren't working."

Though the impact of the EU's fines is debatable, they have forced some reforms. The Associated Pressreported that "Google, which is appealing both of the earlier cases, said ahead of Wednesday's announcement that it has put in place remedies required by the commission."

"We've already made a wide range of changes to our products to address the commission's concerns," said Kent Walker, Google's senior vice president of global affairs. "Over the next few months, we'll be making further updates to give more visibility to rivals in Europe."