Why Google’s (GOOGL) $11B EU Fine Problem May Not Be Over

Tech giant Google (GOOGL) is trying to ease European Union concerns over how news results appear in its Search, as the company looks to avoid adding to its roughly €9.5 billion, or $11.2 billion, in past EU competition fines. The issue is based on whether Google has been pushing down results from publishers that carry ads or content from certain commercial partners. To address this, Google has submitted proposals that would change parts of its anti-spam rules, according to Bloomberg. If regulators and rivals accept the offer, Google could avoid a formal order under the Digital Markets Act.

The investigation began late last year and is part of a broader EU crackdown on Google’s business practices. Under the Digital Markets Act, regulators can fine companies up to 10% of their global annual revenue if they violate the rules. Google said it is continuing to work constructively with the European Commission, while also arguing that its goal is to keep Search useful and protect users from deceptive practices like “parasite SEO” spam.

The specific change would involve Google’s “site reputation abuse” policy, which the EU warned could hurt a normal way for publishers to make money from their websites. In simple terms, Google may loosen rules so news publishers can host certain third-party advertiser content without risking lower visibility in Search results. However, Google still faces other EU investigations, including claims that it favors its own services in Search and limits app developers from directing users outside the Play Store.

Are GOOGL Shares a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 28 Buys and five Holds assigned in the past three months. Furthermore, the average GOOGL price target of $425.19 per share implies 7.1% upside potential.