The European Union last week fined Google $6.7-billion for unfair business practices involving its Android operating system. The amount is a record for a European sanction of this kind, but the fact is that, on its own, it is unlikely to change the way the company does business.
Alphabet, the search giant’s corporate parent, hoovers up a little north of $2.7-billion in revenues each week and is sitting on more than $100-billion in cash and securities.
The latest fine follows on similar measures levied in Europe against Apple (last year, for unpaid taxes) and Facebook (earlier this month, for data breaches). The fines in all three cases fail to amount to anything more than something the companies might consider to be a cost of doing business.
Take Facebook, which was slapped with the United Kingdom’s maximum fine, for a case of that kind, of $860,000. The amount represents what the company recorded in profits every 30 minutes in 2017.
Indeed, the old standby for reining in corporate miscreants and protecting consumers – the financial penalty – may have passed the limit of its effectiveness with Big Tech.
The sheer financial might of tech giants requires new ways of thinking about compliance. Modifying and correcting corporate behaviour takes time and effort, but it can be done.
In the early 2000s, the U.S. government threatened to break up Microsoft. Then-president George W. Bush ultimately backed down, but the threat reverberated. The company changed the way it did business.
Last year, the EU slapped Google with a $3.6-billion fine for anti-competitive practices involving its online shopping tool. It also ordered the company to alter the way it ranks ads in searches. The company is appealing. But it has also revisited its search algorithms.
Governments have the power to send antitrust messages that can’t be ignored. The new practice for European governments seems to be to issue them frequently and loudly. The implicit message – play by the rules or we will keep coming after you – may be the only serviceable option in the future.