Alphabet Inc has brushed off a €4.3 billion fine from the EU, reporting a 26 percent jump in second-quarter revenue. Its shares climbed more than 5 percent on news of stronger than expected ad sales.
However, the tech giant's shares jumped more than 5 percent in after-hours trading after it saw a 26 percent jump in revenues in the same period to $32.7 billion, thanks to stronger ad sales.
Alphabet said net income would have been much higher — $8.3 billion — if not for the EU and other fines.
Google's advertising business, which accounts for the bulk of revenue, grew 24 per cent to approximately $28 billion.
The remaining sales grew by more than 36 per cent to $4.4 billion, the company said.
The results significantly exceeded market expectations, which were diminished by the record $5 billion fine announced by the European Commission (EC) on July 18.
The EC accused Google of unfairly forcing handset makers to take its Chrome, Search and Play Store apps when using its free Android mobile system. While Google has said it will appeal, it has until mid-October to adjust its behavior.
Google faces another fine
Last year, Google received a similar $2.7 billion EU fine for favoring its shopping listings in search results. The EU has one other case against Google regarding its AdSense advertising platform for publishers that is still ongoing.
Google CEO Sundar Pichai dismissed speculation that the company may have to start charging for its mobile operating system, saying he was "confident" of finding a way to ensure "Android is available at scale to users everywhere."
As well as its antitrust battle, Google's dominance is threatened by pressure to improve moderation of user-created content, which has forced the tech giant to hire more analysts.
Google's streaming service, YouTube, has meanwhile increased spending on video content to keep consumers from shifting to offerings from Netflix and other competitors.
But those issues have yet to halt Alphabet, which has grown quarterly revenue at least 20 percent year-over-year for two straight years.
With a stock market value of nearly $840 billion, Alphabet is nearing the trillion-dollar market capitalization mark, but is still about $100 billion behind Apple, the world's most valuable publicly listed company.
Online retail giant Amazon has a slightly higher market capitalization at $874 billion.
Alphabet's stock has risen 15 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 5 percent.
EU: the great antitrust busters
Don't be evil? The EU seems to agree, particularly going by the manner in which it fines the big US software companies when they fall foul of the bloc's laws. Since 2004, penalties for transgressions have risen markedly.
Image: picture alliance/dpa/C. Dernbach
Microsoft tread the Windows ledge
In 2004, the European Commission finished a five-year investigation into Microsoft and concluded that the US tech giant had exploited a monopoly on PC operating systems. The fine was €497 million ($579 million). Within 90 days, Microsoft was obliged to offer a Windows product without its 'Mediaplayer' product.
Image: Imago/H. Rudel
Another blow for Bill and Co
In 2007, the European Commission went for Microsoft again, this time imposing a fine of €900 million. The reason was that they reckoned Microsoft had charged competitors unjustifably high license fees to avail of technical information. This violated previously agreed EU requirements.
Image: picture-alliance/AP Photo/T.S. Warren
Intel Inside Job
In 2009, a record fine was issued with the breaking of the €1 billion barrier. This time, it was the chipmaker Intel, fined €1.06 billion in what was part of a near-decade long dispute over cartel activity. The EU said that Intel had abused its market position by obliging clients such as Saturn and Media Markt to sell PCs made with Intel chips.
Image: Imago/Xinhua
Just browsing, and just one browser...
In 2013, Microsoft had to dole out another €561 million to the EU. This time, the company was accused of failing to offer an adequate choice of browser to its customers, as it had promised it would a few years earlier. The Commission said that from May 2011 to July 2012, Microsoft had failed to do this.
Image: picture-alliance/dpa/M. Balk
To Infineon - €100 million - and beyond!
In 2014, the European Commission slapped a fine of €138 million on four different chip manufacturers, including the Munich-based company Infineon, which had to pay the vast majority of the total amount. Their sin was that between September 2003 and September 2005, they had engaged in price controlling activity with the likes of Philips and Samsung.
Image: picture-alliance/dpa/J. Büttner
Ok Google, stop manipulating search results
In 2017, Google was ordered to pay a whopping €2.42 billion fine into the EU coffers, with the Commission accusing the search kingpin of manipulating online shopping searches, abusing its market position as a result. The specific transgression was that Google had prioritised its own services' price comparisons in search results ahead of its competitors.
Image: picture alliance/dpa/S. Hoppe
Qualcomm eats the forbidden Apple
In 2017, Qualcomm, a chip supplier of US behemoth Apple, had to pay €997 million to the EU. The accusation was that the US company had been paying a fortune to Apple in order to thwart its own competitors. It meant that Qualcomm had abused an already dominant position to exclude other LTE chipset makers from the market.
