A Russian regulatory agency said on Tuesday that Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has been fined 2 billion rubles ($34.2 million) for abusing its position in the Russian video hosting market.
The Federal Antimonopoly Service targets YouTube
The fine from the Federal Antimonopoly Service targets Google’s subsidiary YouTube, which the FAS says “abused its dominant position in the YouTube video hosting services market.” The decision is the latest multi-million dollar fine as part of Moscow’s increasingly assertive campaign against foreign tech companies.
A spokesperson for Google told Reuters it would “study the text of the official decision to define our next steps.
Alphabet fell just over 1% in early trading on Tuesday.
FAS added that Google has to pay the fine within two months of its issuance. The $34 million fine is just the latest in a series of spats between Google and Russia.
Earlier this month, Google was fined 21.1 billion rubles, or about $370 million, by a Russian court for what it said was a repeated breach of the removal of content deemed illegal.
In 2021, Google was fined more than 7 billion rubles, equivalent to approximately $143 million, by Russia for failing to remove illegal content.
The Russian subsidiary of Google filed for bankruptcy last month.
Free Google services such as Google Search, YouTube, Gmail, Maps and Google Play remain accessible in Russia despite the bankruptcy filing.
Alphabet Expected to Report Slower Growth in Q2
Alphabet is expected to report its second-quarter results after the close of trading today.
Investors will likely expect a slowdown in digital advertising. But they may not be prepared for TikTok’s anticipated impact on YouTube and GOOGL stocks.
Google shares sold off on July 22 after Snap (NYSE:SNAP) reported disappointing second-quarter results. Snap’s earnings and revenue missed estimates as a weak ad market took its toll.
As Google’s earnings report approaches, analysts have lowered their estimates.
Analysts predict Alphabet’s revenue will grow nearly 13% to $70.2 billion, a slowdown from 62% growth the previous year. They see earnings per share dropping 6% to $1.28.
Wall Street estimates YouTube’s revenue growth will slow to 7% from 14% growth in the March quarter. In the prior year period, YouTube ad revenue jumped 84% as Google rebounded from the coronavirus pandemic.
In a recent report, Cowen analyst John Blackledge reduced his estimate to 7.5% revenue growth for YouTube.
“Our latest survey again highlights potential risk to YouTube mobile viewing share amid the rise of TikTok,” he said. “Among the 18 to 24 demographic, YouTube led all platforms in Q2 when respondents were asked which platform they used ‘most often’ for mobile video. But YouTube dropped to 40% of respondents vs. 48% in Q2 2021. TikTok placed No. 2 with 22%.”
In June, Google said YouTube Shorts now has 1.5 billion monthly logged-in users worldwide. YouTube Shorts is a short video rival to TikTok. But YouTube is still testing advertising in the short form video service, which is not profitable yet.
According to Bank of America analyst Justin Post, Google is likely better positioned than its peers for an advertising slowdown.
“While more revenue cuts for advertising stocks are likely, we think Alphabet has more relative revenue stability given its breadth of advertisers,” he said in a report.
He added that during the earnings call, management might have to deal with stricter consumer spending comparisons/pressures, TikTok’s impact on YouTube, negative cloud margins and product pipeline to drive renewed enthusiasm for the stock.
Year-to-date, Alphabet stock has lost more than 25% of its value.
Featured Image: Megapixl @Nadeesha5814
