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Google Is Facing Potentially Costly Probes in Italy and India

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May. 24 2019, Published 8:07 a.m. ET

Probes focus on Android

Alphabet’s (GOOGL) Google is facing antitrust probes in Italy and India that could result in massive fines. In Italy, the country’s antitrust regulator is investigating whether Google abused the dominance of its Android platform. The probe in Italy was triggered by a complaint from the country’s utility company Enel. The complaint is about Google refusing to add an app developed by Enel into the Android software for vehicles, Reuters reported.

In India, the country’s antitrust watchdog opened a probe to ascertain whether Google is abusing the dominance of its Android platform in mobile devices. According to a Reuters report, India’s probe is similar to a European Union probe that resulted in Google being fined $5.0 billion last year.

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Google could be fined up to 10% of revenue

Google could be fined up to 10% of revenue from relevant businesses for the last three financial years if found in violation of India’s antitrust law.

Fines aside, the probes in Italy and India could diminish Google’s competitiveness if they result in the company being forced to make significant changes to its business model. The Android platform is crucial to Google’s advertising business, which contributes the vast majority of its parent Alphabet’s revenue. Advertising contributed 85% of Alphabet’s revenue in the first quarter compared to 72% at both Yandex (YNDX) and Baidu (BIDU). Facebook (FB) and Twitter (TWTR) derived 99% and 86% of their revenues from advertising in the first quarter, respectively.

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