Alphabet, Google’s parent company, delivered pretty decent 2018 second quarter results this week. Just days after being hit by a $5.1 billion antitrust fine by the European Commission, the company reported $32.7 billion in revenue for the three months ending June 30, up 26% from the second quarter of 2017.
However, Alphabet’s profitability took a severe hit in the second quarter. After accounting for the fine, net profit for the second quarter amounted to only $3.2 billion, compared to $8.3 billion when the fine is disregarded, and $9.4 billion in the first quarter of 2018.
As the chart illustrates, this is the third time in just 15 months that Alphabet’s profit has taken a major hit from unexpected expenses. One year ago, in the second quarter of 2017, Google was fined $2.7 billion by European regulators in another antitrust case and last year’s fourth quarter results were dragged down by a $9.9 billion tax expense related to President Donal Trump’s U.S. Tax Cuts and Jobs Act.
The European Commission (EC) is an institution of the European Union (EU), responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU. The Commission operates as a cabinet government, with 28 members (informally known as “commissioners”). There is one member per EU member nation, but members are bound by their oath of office to represent the general interest of the EU as a whole rather than their home state. Please don’t Google this!