Heather Clancy is a contributing editor at Fortune.
Google’s legal team certainly has its hands full, and billions of dollars are at stake.
In San Francisco, its lawyers are fighting allegations that it skirted Oracle’s copyrights for Java, the open source software programming language, when it designed the Android mobile operating software. And now Europe’s tough antitrust policewoman, Margrethe Vestager, appears ready to make good on her threat to make Google pay up for its overwhelming success in search algorithms and mobile computing software.
Over the weekend, the British newspaper The Telegraph reported that the European Commission is preparing a fine of 3 billion euros (around $3.4 billion). That’s triple the amount that Intel was levied several years ago over sales practices that Europe said were unfair to its primary rival from the past decade, Advanced Micro Devices. On the bright side, it’s only half the amount Europe could fine Google, which is an estimated $6 billion based on its annual revenue. And it’s not official yet.
Some of the charges Google is fighting in Europe are reminiscent of the ones that gave Microsoft trouble about 13 years ago. Both have drawn the ire of competitors for their practice of “bundling” their own applications with their operating system software—Microsoft was targeted for preferring its Internet Explorer browser on computers running Windows (a practice it was forced to change), while Google is under attack for favoring its search app on smartphones and tablets that use Android.
Google is also in trouble over how its algorithms organize Internet search results—to the detriment of certain web price comparison and shopping sites that originate in Europe. The company actually managed to fend off these charges for seven years before Vestager turned up the heat again. As Europe circles, Google also faces renewed scrutiny in the United States—the Federal Trade Commission is reopening its investigation, even though the agency voted unanimously to close it just two years ago.
What should make Google’s situation in Europe especially concerning to other software companies is that the suggested remedy is likely to require that the company rewrite its software algorithms for how data is collected, analyzed, and displayed. The “fix” isn’t simply a matter of changing sales practices or processes, as was the case with Intel. It could force changes at the engineering level, which is something that Google has resisted adamantly along the way—appealing to the needs of consumers.
How Europe plans to enforce such changes technically is anyone’s guess—unless it hires programmers as smart as the ones employed by Google—especially since it fell down on the job when it came to policing the Microsoft agreement. And that was a far simpler change to monitor.
This unfolding case should give other big software companies facing antitrust scrutiny in Europe—especially Facebook, which is being investigated in Germany—plenty to think about for many years.
BITS AND BYTES
Warren Buffett may finance Yahoo bidder. The legendary investor is putting his money behind a consortium led by Quicken Loans founder Dan Gilbert, reports Reuters. By the way, Yahoo CEO Marissa Mayer just lost another longtime ally internally. Product director Robby Stein, who led mobile and video strategy in New York, has accepted a “leadership” role with Instagram. (Reuters, Recode, Recode)
Amazon considers more private-label goods. The e-commerce giant is preparing to launch more products under its own brand names, reports The Wall Street Journal. Items under consideration include everything from diapers and laundry detergent to perishable foods. The market for retailer-owned goods was about $118 billion in 2015. (Wall Street Journal)
Mark Zuckerberg invites influential conservatives to chat. Facebook’s co-founder and CEO will host a meeting Wednesday to outline the social network’s editorial policies. Zuckerberg has refuted claims that Facebook suppresses “trending” stories from conservative media outlets, but he has launched an internal investigation to address the criticisms. (Time)
Tim Cook heads for China and India. Apple’s CEO was in Beijing on Monday, where he met with the CEO of Didi Chuxing days after Apple disclosed its $1.1 billion investment in the ride-sharing company, Uber’s fiercest rival in China. He is also expected to meet with local government officials to discuss China’s privacy and regulatory stances. Cook’s rumored next stop: India, where Apple wants to establish a retail presence. (Reuters, Reuters)
Looks like that big Dell bond sale will be this week. The tech giant plans to auction $16 billion in various notes in order to help fund its takeover of EMC. That would be the second-biggest corporate issue this year, after one by Anheuser-Busch InBev. (Bloomberg, Reuters)
Will Amazon get into the business software game? Amazon Web Services has created a healthy business selling basic technology infrastructure. During its fourth quarter, its computing, storage and networking service sales rose 64% to more than $2.5 billion from the year-ago quarter.
Its primary service, known as the Amazon cloud, centers on renting huge pools of computers, storage, and networking on a pay-as-they-go basis. But there’s a growing debate about whether the public cloud giant will stick with its tried-and-true model. Instead of merely renting computing power, the theory goes, Amazon could also start selling its own software like Microsoft does with Office, Salesforce does with its sales apps, and SAP does with accounting software. (Fortune)
IN CASE YOU MISSED IT
Another smart blog post from Intel, but better results still needed
by Aaron Pressman
Alibaba and Softbank team up to build Japanese cloud by Barb Darrow
Google exec Amit Singh trades virtualization for virtual reality
by Jonathan Vanian
How blockchain technology could reinvent the power grid by Don Tapscott & Alex Tapscott
ONE MORE THING
Sheryl Sandberg preaches resilience. Facebook’s widowed COO reminds Berkeley graduates about the need for an “Option B” in a heartfelt commencement speech. (Fortune)
|This edition of Data Sheet was curated by Heather Clancy.|