History of failure
The European Union has had a few high-profile cases in the past. Notably, it sued Microsoft (NASDAQ:MSFT) for the inclusion of Internet Explorer with the Windows operating system. The argument was that Microsoft wasn't giving customers a chance to choose how they browsed the web. Microsoft was ordered to add a screen giving users the option to choose a browser in all of its future Windows releases.
The company added the screen -- and then took it out. In May 2011, it simply removed the screen and then didn't put it back in. By that point it may not have mattered -- Internet Explorer was splitting the market with Chrome and Firefox by that point -- but it was still a violation of the settlement reached with the EU. As a result of the failure, Microsoft was recently fined $730 million. That's a settlement, and will probably make the company think twice next time. But the real story isn't that Microsoft broke its deal, it's that no one bothered to even check.
Google and Microsoft aren't the only companies in the spotlight. Recent proposals from inside the EU have called for stricter privacy policies across the board. Facebook (NASDAQ:FB) and other social networking sites could soon be subject to a policy supporting the "right to be forgotten." That would mean giving user a clear view of what information the business held on them, and then allow customers to remove any data they wished to purge.
The reaction from the tech companies has been firm, with Facebook's CFO Sheryl Sandberg reminding the countries that Facebook generated "$15.3 billion in value [for] the European economy" in 2011.The statement came just after the announcement of the new legislation, last year. Now, it's being put to test in the Google case.
There is a new piece of legislation being debated that would make changing Google's mind a bit easier. While fines are currently limited, the new act would give countries the ability to fine a company for up to 2% of its global revenue. That's a bigger chunk of change, and could be the fire that gets Google boiling. Unfortunately for regulators, the new fines aren't expected to be in place until next year. For now, the smaller penalties will have to do.
Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.