British Car Firms Fear Brexit, Aston Martin Warns British Government


London – Car firms working in the UK have felt increasing pressures and forecasts say vehicle production will drop this year compared to the last year, driven by the ambiguity of Britain’s post-Brexit situation in 2019.

Cars manufactured in Britain dropped by 14 percent in June compared to the same month in 2016, while manufacturing is expected to reach 1.8 million cars in 2017 compared to over 1.9 million in 2016. More than half of cars produced in the UK are exported.

However, the kingdom’s decision to leave the European Union has omitted the protection of the British industry, as Europe imposes 10 percent fees on car imports.

If the British car firms don’t sign a commercial agreement that exempts them from these fees, they will face many problems in exporting their cars to Europe.

For its part, Aston Martin considered that legislation without the required support that seen in Germany, China, Japan and South Korea is potentially hazardous to the future of the domestic industry.

Aston Martin’s Chief Marketing Officer Simon Sproule also highlighted the importance of electric cars. He said the UK risks simply becoming a massive importer of batteries if it does not fund the transition to zero-emissions technology.

Even with help, a future with only electric vehicles poses a challenge for automakers such as Aston Martin, McLaren Automotive and Morgan Motor. Aston Martin will test whether its customers are willing to pay for a battery-powered model when it rolls out the all-electric RapidE in 2019.

The company said by 2040, it plans to offer a zero-emissions variant of all of its models, but electric vehicles will work in every situation for every consumer. Electric cars currently account for less than 5 percent of new-car registrations in Britain.

Hammond Acknowledges Govt. Difference: UK Will Pay Brexit Debts


UK Finance Minister Philip Hammond acknowledged on Sunday that there are differences in the government over Brexit, stressing however that London will pay the debts it owes Europe after it leaves the European Union.

He confirmed that Britain’s financial settlement would be top of the agenda when the Brexit negotiations, which started last month, resume in Brussels on Monday.

“We’re not a country that walks away from its debts.”

“We are a country that always honors its obligations. If there is any amount that is due when it’s been properly quantified and audited, of course we’ll deal with it,” he told the BBC.

Hammond brushed off remarks by foreign minister Boris Johnson that the EU could “go whistle” for its money, saying this was a direct reference to claims that Britain may be asked to pay up to 100 billion euros ($112 billion).

He described this figure, confirmed to AFP by EU officials but never publicly announced, as “ridiculous”.

He also said the cabinet was coming closer to an agreement on the need for some kind of transitional arrangement when Britain leaves the EU, which could last a “couple of years”.

But he acknowledged that ministers were divided on other elements of Brexit, after the weekend newspapers were filled with reports of in-fighting — including potentially damaging briefings against him over public sector pay.

“Some of the noise is generated by people who are not happy with the agenda which I, over the last few weeks, have tried to advance of ensuring that we achieve a Brexit which is focused on protecting our economy,” he said.

Since the June 8 election, when the ruling Conservatives lost their majority in parliament, Hammond has been increasingly outspoken about the need to retain economic ties with the EU.

Before the vote, Prime Minister Theresa May had made clear that her priority was cutting immigration, a major issue in last year’s referendum vote to quit the bloc.

But May has struggled to assert her authority since the election, and weeks of media briefings suggest rivals are positioning themselves to replace her.

Hammond insisted he was not part of this.

“I think on many fronts it would be helpful if my colleagues — all of us — focused on the job in hand. This government is facing a ticking clock over the Brexit negotiations,” he said.

Inter-Arab Ties Remain Bound to Dreamy Intellect


Two speeches of late Tunisian President Habib Bourguiba have left a mark in the Arab world. The first was in Jericho, West Bank, in 1965, when he called on Arabs to implement United Nations Resolution 181 issued on Nov. 27 1947.

The second speech was delivered at le Palmarium in the presence of former Libyan leader Muammar Gaddafi, in 1972. He responded to Gaddafi’s proposal to unite the two countries by saying each of them should first unite their own states.

After the first speech, Bourguiba came under attack and Arab media described him as an agent who abandoned Palestine and betrayed the Arab nation. As for the second speech, Gaddafi and Bourguiba disregarded it and signed the Djerba Declaration on the unity of Tunisia and Libya. 

In his speech in Jericho, Bourguiba was expressing the doctrine of his school, which he established and was among its first students and instructors – its main methodology was “Take and demand”. As for the second speech, it was based on the thought: “Be realistic and ask for the impossible”.

International developments have been huge and comprehensive in the past two decades. The Soviet Union collapsed as well as its Eastern Bloc, the communist military Warsaw Pact opposing NATO also disintegrated, the age of ideology vanished and the giant political and economic European Union emerged.

Military, fascist totalitarian regimes have also collapsed in Latin America and tiger economies emerged, leading to a renaissance in the global south. A new, national, democratic, powerful enlightenment movement began and the Revolutionary Left Wing relapsed. China appeared as an economic force invading the world with its cheap products, urging its citizens to head towards continents for investment and providing enormous aid to poor countries in Africa and Asia without having political ambitions.

Away from the illusion of Maoism, Deng Xiaoping’s philosophy was enough to wipe out the philosophy of Mao Zedong with one sentence: “It doesn’t matter whether the cat is black or white, as long as it catches mice”.

This was accompanied by the rise of what was known as the Asian Tigers that have occupied a significant position in the global economy. Comprehensive developments and economic and political blocs represented an alternative for the post-World War II maps and the end of the Cold War.

A new world was formed by the enormous technical revolution and the development of production. Years passed and changed everything: politics, economy, culture, education, technology and telecommunications. Some philosophies and methodologies showed up and altered the humanitarian mindset.

Economic coalitions were formed and military actions were remarkably abandoned amid the pursuit to achieve national ambitions and goals.

What have we achieved?

We haven’t well perceived what has happened, neither did we assess its influence. We didn’t import what would enrich us with this new formation or invent a new intellect that would pave the way to the new world. We didn’t reject any of our old thoughts nor did we plant seeds of new thoughts.

I believe that the Arab identity’s walls crumbled centuries ago although we seek cover under this slogan.

Humans grow like other creatures – the accumulation of experience, education and learning creates new entities and creatures – this is the secret behind the continuity of life.

If you had told a US citizen in 1970 that his country will be led by an African-American with a Muslim father, he would have been sarcastic. And if you had told another that a woman will run for the presidential elections and have good chances in winning, then he would have slapped you. The same thing would have happened if you had told a British citizen that a Muslim man will be the mayor of London.

Inter-Arab ties remained bound to dreamy intellect not realistic new standards. Slogans of unity were raised before the war was waged. The Arab League is one of the oldest regional entities but nothing in it has changed since its establishment in 1945 because the mind that established it has never developed.

If we start with the implementation of the good neighborliness policies and then move to developing trade exchange, then a new phase of bilateral thinking would emerge, leading to tangible results.

The mentality of remains is what made the distance between Gaza and the West Bank longer than that between them and Tel Aviv.

May Extends Hand to Opposition as Brexit Beckons


British Prime Minister Theresa May has turned to the opposition as the country gears up to exit the European Union.

The appeal comes nearly a year after May took office, and just over a month after she suffered a setback from voters in a snap election.

She plans to use a speech on Tuesday to urge the opposition to help hone policy, saying the government’s ideas can be “clarified and improved” through debate and discussion. Extracts of the speech were released in advance by May’s Downing St. office.

“My commitment to change in Britain is undimmed,” May will say on Tuesday.

As her minority government prepares to start the difficult task of passing Brexit through parliament, the PM will remind Britons of her promise to build a fairer society, seeking to repair a reputation damaged by an ill-judged snap election.

May became British leader on July 13, 2016 through a Conservative Party leadership contest after predecessor David Cameron resigned when voters decided, against his advice, to quit the EU. She called an early election for June 8 in an attempt to bolster her majority and strengthen her authority during EU exit talks.

The gamble backfired when voters stripped the Conservatives of their majority in parliament and boosted the number of seats held by the left-of-center Labor Party.

The result means May must rely on deal-making and compromises to pass legislation, and is struggling to persuade her party that she is not a lame duck.

“In this new context, it will be even more important to make the case for our policies and our values, and to win the battle of ideas both in parliament as well as in the country,” May will say.

The defeat has emboldened opponents of Brexit, who hope to make the government take a more conciliatory line in divorce talks with the EU.

The election setback has led the government to abandon many of the pledges May campaigned on, including plans to reform secondary education and make seniors pay more for their long-term care.
Instead, the government says it will devote its energy to trying to pass the laws needed to pave the way for Brexit — due to take place in March 2019.

Now, May is seeking to re-boot her premiership, harking back to a promise on her first day in office to “forge a bold new positive role for ourselves in the world and … make Britain a country that works not for a privileged few, but for every one of us.”

Acknowledging that the election result “was not what I wanted,” May on Tuesday will urge opposition parties “to contribute, not just criticize.”

“We may not agree on everything, but through debate and discussion — the hallmarks of our parliamentary democracy — ideas can be clarified and improved and a better way forward found,” she plans to say.

May’s most senior Cabinet Minister, Damian Green, said Monday that the speech was an appeal for “a grown-up way of doing politics.”

And despite rumors of Conservative plots to oust May, Green told Sky News that “the prime minister is determined to carry on to lead the party and the country for many years to come.”

The first stage of the Brexit process will come later this week when a key piece of legislation, which translates EU law into British law, is presented to parliament.

Green told Sky News he was confident the government could get the legislation through.

Asked about media reports of plots to oust her, he said it was simply “gossip and chatter” at summer parties.

“There is no credible plot going on,” he said. “The prime minister is determined to carry on, to lead the party and the country for many years to come and the overwhelming majority of Conservative MPs (lawmakers) are behind her in that.”

May will make the appeal for national backing at the launch of a report into how the government should protect workers affected by a shift to different employment models, including the “gig economy” championed by the likes of Uber and Deliveroo.

The report is a key element of May’s plan to address dissatisfaction expressed at the referendum by working class Britons who felt left behind by globalization.

“At this critical time in our history, we can either be timid or we can be bold,” May will say. “We will act with an unshakable sense of purpose to build the better, fairer Britain which we all want to see.”

Barzani Heads to Brussels to Tackle Independence Referendum with EU


Erbil – The Higher Council for the Referendum in the Iraqi Kurdistan region affirmed on Saturday its commitment to holding an independence vote on September 25.

Head of the region Masoud Barzani is meanwhile scheduled to travel to Brussels next week in order to address the vote with European Union officials.

Media aide for the Kurdistan region’s presidency, Kifah Mahmoud, told Asharq Al-Awsat that Barzani will be making his trip to Belgium at the request of the EU.

The Kurdish people’s independence vote will be the first and most important topic of discussion with European officials, he said.

The president will explain the various aspects of the process and the reasons for holding it, he added.

“The EU has many questions over this issue,” Mahmoud said.

The region will invite all rights and media organizations to oversee the vote, he stated.

Meanwhile, a spokesman for the region Amid Sabah told reporters following the Higher Council for the Referendum meeting that the affirmation of the vote date was “effectively the first step to holding the general vote in Kurdistan.”

The gatherers agreed on the council’s general structure and “we will then enter the implementation phase whereby the secretariat will chose its representatives at the council’s various branches,” he explained.

Members of these branches will kick off visits to Baghdad and various countries to tackle the independence vote and clarify it to all sides, he said.

The Higher Council for the Referendum meeting also stressed the need to resolve problems linked to the political process in Kurdistan and to adopt serious measures to improve the citizens’ living conditions.

European Powers Pledge More Support to Italy, Libya in Migrant Crisis


France, Germany and the European Union have vowed to exert more efforts in helping Libyan and Italian authorities in dealing with the flow of migrants.

The intensified European effort comes after the UN High Commissioner for Refugees, Filippo Grandi, on Saturday decried an “unfolding tragedy” in Italy over the weekend with 12,600 migrants and refugees pouring onto its shores. Grandi noted that more than 2,000 people have lost their lives on the Libya-to-Italy sea route this year.

The agency reported that more and more people lured to Libya with the hope of finding jobs there end up trying to reach Europe.

Officials appeared to be bracing for prospects of an accelerated flow of migrants as the Mediterranean weather warms, making often-perilous maritime journeys more attractive.

“We are only at the beginning of the summer, and without swift collective action, we can only expect more tragedies at sea,” Grandi, who is Italian, said in a statement. Like many others in his office in recent months, Grandi repeated calls for an “urgent distribution system” for incoming migrants and refugees, and “additional legal pathways to admission.”

On Monday, the EU migration commissioner and the German, French and Italian interior ministers promised extra money and training for the Libyan coast guard and efforts to reinforce Libya’s largely lawless southern border that people smugglers exploit. No further details, including how much more money was pledged, were immediately provided.

The officials held a crisis meeting in Paris on Sunday after Italy pleaded for European help amid the surge. Italy will host a conference in Rome this week aimed at protecting the EU’s external borders while strengthening efforts to work with African nations along migrant routes to Libya.

The Foreign Ministry said participants at Thursday’s meeting will include officials from the EU and UN refugee and migrant offices.

Grandi’s office said Monday that people smuggling and migrant flows in Libya were on the rise, and predicted Europe could face a greater influx in the future. UNHCR said patterns of movement through Libya have been changing, as organized crime rings have become internationalized and “trafficking for sexual exploitation” appears to be increasing.

A UNHCR-commissioned report released Monday found “about half of people who travel to Libya do so believing they can find jobs there, but end up fleeing onwards to Europe to escape life-threatening insecurity, instability, difficult economic conditions plus widespread exploitation and abuse,” a news release said.

UNHCR says 84,830 migrants and refugees have reached Italy’s shores so far this year from Libya, a 19-percent increase from a year earlier. Seven in 10 are economic migrants and the rest are “people in need of protection” like refugees and asylum-seekers.

Vincent Cochetel, UNHCR special envoy for the Central Mediterranean, told reporters in Geneva that the agency’s teams have indicated “no slowing down on movement to Libya, which may mean that a larger number of people may continue to try to leave through the Central Mediterranean route.”

Italian Prime Minister Paolo Gentiloni’s center-left government has stepped up pressure on fellow EU nations to convince them to take in some of the hundreds of thousands of migrants rescued in the Mediterranean and brought to Italy in recent years.

Gentiloni said Monday that unless other EU countries assume some of the migrant crisis burden, the huge numbers could fuel hostility in Italian society.

“Italy has mobilized to deal with the flows of migrants,” he said, adding that Europe must help if it “wants to stay faithful to its own principles, own history, own civilization.”

Spain’s foreign minister said that all EU members need to discuss Italy’s proposal for other countries in the bloc to open their ports to ships carrying rescued migrants.

Alfonso Dastis told journalists in Madrid that “our position is that exceptional situations require exceptional measures as a response, but they need to be discussed among all countries.”

Macron Proposes Deep Reform, including Reducing Number of MPs, Lifting State of Emergency


In a ceremonial address to parliament, French President Emmanuel Macron pledged on Monday that he would seek to implement “deep reform”, which would include reducing the number of lawmakers and ending the country’s state of emergency.

He said that a parliament with a lower number of MPs and with strengthened means, will be able to operate with greater ease.

He added that he would seek direct approval from voters in a referendum if parliament failed to sign off his intended institutional reforms quickly enough.

Elected only two months ago by a hefty majority, Macron told the lawmakers of both houses, summoned especially to the Palace of Versailles, that he wanted to cut the number of lawmakers by a third, curb the executive’s role in naming magistrates, and introduce a “dose” of proportional representation.

Macron’s upstart Republic on the Move (LREM) party has secured a comfortable majority in the National Assembly – but France’s youngest leader since Napoleon made clear his impatience to complete the reshaping of the political landscape that he has begun.

“The French people are not driven by patient curiosity, but by an uncompromising demand. It is a profound transformation that they expect,” Macron told the specially convened joint session of parliament.

“I want all these deep reforms that our institutions seriously need to be done within a year. These reforms will go to parliament but, if necessary, I will put them to voters in a referendum.”

Macron also pressed his case for reform of Europe.

An ardent advocate of deeper European Union integration who put reviving Europe’s Franco-German axis and treaty reform at the center of his presidential campaign, Macron said excessive bureaucracy had fueled euroskepticism among the public.

“The last 10 years have been cruel for Europe. We have managed crises but we have lost our way,” Macron said.

“I firmly believe in Europe, but I don’t find this skepticism unjustified.”

Macron, whose centrist platform has routed both the traditional rightist and leftist parties of government, is not the first French leader to convene a so-called Congress of both houses, though past presidents have tended to use it in times of crisis or for constitutional reforms.

He also vowed to lift a state of emergency that has been in place since 2015, but also to harden permanent security measures to fight extremism and other threats.

Macron said his government “will work to prevent any new attack, and we will work to fight (the assailants) without pity, without regrets, without weakness.”

At the same time, he insisted on the need to “guarantee full respect for individual liberties” amid concerns that new measures would allow police too many powers.

Macron vowed to maintain France’s military interventions against extremists abroad, especially in Africa’s Sahel region and in Iraq and Syria. He also insisted on the importance of maintaining “the path of negotiation, of dialogue” for long-term solutions.

Macron also announced Europe-wide public conferences later this year in an effort to reinvigorate the European Union after Britain’s vote to leave.

He said he understood why many Europeans see the EU as bureaucratic, distant and uncaring.
“I firmly believe in Europe, but I don’t find this skepticism unjustified,” he said.

He also said European countries should work more closely to help political refugees while fighting migrant-smuggling and strengthening borders against illegal migration.

Critics who fear Macron is trying to amass too much power organized protests over Monday’s event.

Lawmakers from the far-left party of Jean-Luc Melenchon and communists decided not to attend the speech in protest against what they call a “presidential monarchy”.

After his new centrist party dominated parliamentary elections and split the opposition, political rivals are comparing Macron to Napoleon, or the Roman king of the gods, Jupiter.

They are especially angry that he wants to strip worker protections through a decree-like procedure, allowing little parliamentary debate.

Macron also broke with tradition in convening the Versailles parliament session just one day before his prime minister is to face —and likely to win— his first confidence vote in parliament.

Can London Survive?


Ever since Britain voted to leave the European Union, analysts have debated the City’s fate. In 2016, the British financial services sector employed more than 1 million people (3.1 percent of all UK jobs) and contributed around 7.2 percent of the UK’s total gross value added, just over half of it from London. Any threat to the sector — and to London’s place as arguably the leading global financial center — would be a major blow.

Fortunately for the UK, Brexit itself won’t erode the significant advantages London currently enjoys. Perhaps more importantly, neither will it help European rivals build up similar advantages.

It’s easy to see why cities such as Paris and Frankfurt (or Amsterdam, often mentioned as a compromise candidate) imagine they can steal business away from London. For one thing, all overlap with Asian and US markets during the trading day.

London largely depends on transaction flow from European markets, British and European multinationals, international fund managers, insurers and global currency and derivatives trading. It also benefits from transactions completed elsewhere which flow through key exchanges or markets. LCH Clearnet Group Ltd., owned by the London Stock Exchange, clears over 50 percent of interest-rate swaps across all currencies. London clears 97 percent of dollar interest-rate swaps and 75 percent of those in euros. There’s no inherent reason that business couldn’t shift elsewhere.

But London also has some unique advantages over its competitors. English is the lingua franca of international finance. English law governs the bulk of international transactions and English courts are particularly well-regarded.

Institutions like the Bank of England command great confidence. Low taxes, reliable corporate laws and regulations that have historically been responsive to evolving industry needs all add to London’s financial power.

London benefits from network effects, where similar businesses and supporting services such as lawyers, accountants and consultants are located within close proximity to one another. Good infrastructure, technology and telecommunications as well as convenient transport links are key advantages. Even more important is access to a skilled labor force with the relevant expertise. London has historically treated foreign workers generously, especially in the financial services industry, although Brexit could make hiring European bankers more difficult.

It’s difficult to see Frankfurt, Paris or Amsterdam accommodating an English-speaking, English-law financial culture. Developing the infrastructure and networks needed to sustain a global financial center will take time, regardless of French President Emmanuel Macron’s invitation for foreigners to move to Paris. Neither Paris nor Frankfurt have a global trading culture, which in the cases of London and Amsterdam evolved over centuries of trading in goods and services.

An aggrieved European Union is obviously keen to use Brexit to diminish London’s much-resented financial dominance. The current debate about euro clearing is one example. Given that the UK was never part of the euro zone, there’s no reason it can’t continue to act as a clearing house. Nothing stops the relevant firms from agreeing to abide by EU laws and directives, supported by UK legislation. London-based financial firms can access European customers by complying with common-market rules under equivalent regulation provisions, or by establishing or using existing European entities.

Indeed, at a deeper level, the whole debate around London’s future as a financial center is perverse. Markets are global. Advances in technology and communications make location largely irrelevant. Most transactions are concluded electronically. People routinely work remotely and transactions are completed between firms and individuals who may never meet other than electronically.

The companies that dominate the UK financial services industry are mostly foreign and many of the transactions have little to do with Britain. Transactions are frequently not even recorded in London but booked elsewhere. Many functions are no longer performed in London but have migrated to other parts of the UK or further afield in order to save money.

The reality is that financial centers are creatures of tradition, habit and comfort. The concentration of financial firms in a small number of cities is driven by social connections and proximity of people in related fields, as well as factors important to highly paid financiers, such as reasonable personal income tax rates and an acceptance of large bonuses.

The perfect mix includes lifestyle issues which affect families, such as housing, education and health (not to mention reasonable divorce laws, given the prevalence of break-ups). Inevitably, a tolerance for masters of the universe (and those huge bonuses) is helpful.

These conditions aren’t easily replicated. London may or may not continue its historical role as a major financial center. But its competitive advantages are substantial — and won’t be easily eroded even by a hard Brexit.

US Draft-Law Urges Europe to Designate ‘Hezbollah’ as Terrorist Organization


Washington – The United States Senate Committee on Foreign Relations will study on Thursday a draft-law that urges the European Union to designate Lebanon’s “Hezbollah” as a terrorist organization.

During five sessions on the Middle East, three of which will be dedicated to Iran, the Senate will also address Tehran’s human rights violations and oppression of religious minorities.

The draft-law directed to the EU was drafted by Democratic Congressman Theodore Deutch and focuses on “crimes and attacks of the terrorist ‘Hezbollah’.” It acknowledges that the EU designated the party’s military wing as a terrorist entity, but not the organization as a whole.

He stressed that “Hezbollah” is part of the illegal drug and arms trade and money-laundering networks throughout Europe. It is using funds generated from this activity to finance terrorist attacks. The party is also sponsored by Iran and Syria that finance it and provide its members with training and weapons.

According to US Defense Department officials, Tehran provides up to 200 million dollars a year to “Hezbollah” in the form of financial support, arms and training. The party has an arsenal of around 150,000 rockets and its fighters are supporting the Syrian regime of Bashar Assad.

The draft-law calls on the EU to impose sanctions on terrorists associated with “Hezbollah” in line with the sanctions imposed by the US. It is also urged to designate the whole party as terrorist, issue arrest warrants against its members and backers, freeze its assets throughout Europe and ban any fundraising campaigns for the party.

The draft-law underlines the importance of achieving greater cooperation between the US and EU in thwarting “Hezbollah’s” criminal and terrorist activity and increasing the exchange of intelligence to that end.

The Senate Committee on Foreign Relations will also study a draft-law submitted by Democrats and Republicans that calls on Iran to unconditionally release all American citizens its has imprisoned.

US citizen Robert Levinson traveled to Iran in 2007 and disappeared while visiting the island of Kish. For ten years, Washington has tried to pressure Iran to provide any information about his fate and ensure his safe return to his family. Iranian government officials had pledged to do so.

EU Hits Google with Largest Fine in its History over Antitrust Issues


Brussels, Cairo – European Union antitrust regulators hit Google on Tuesday with a historic and unprecedented fine of 2.42 billion euros (2.7 billion dollars) over the company’s dominance in searches and smartphones.

The fine against Alphabet unit Google, is the biggest the EU has ever imposed on a single company in an antitrust case.

It exceeded a 1.06-billion-euro sanction handed down to US chipmaker Intel in 2009.

The European Commission said the world’s most popular internet search engine has 90 days to stop favoring its own shopping service or face a further penalty per day of up to 5 percent of Alphabet’s average daily global turnover.

The fine, equivalent to 3 percent of Alphabet’s turnover, is the biggest regulatory setback for Google, which settled with US enforcers in 2013 without a penalty after agreeing to change some of its search practices.

The EU competition enforcer has also charged Google with using its Android mobile operating system to crush rivals, a case that could potentially be the most damaging for the company, with the system used in most smartphones.

The company has also been accused of blocking rivals in online search advertising.

The Commission found that Google, with a market share in searches of over 90 percent in most European countries, had systematically given prominent placement in searches to its own comparison shopping service and demoted those of rivals in search results.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” European Competition Commissioner Margrethe Vestager said in a statement.

Google said its data showed people preferred links taking them directly to products they want and not to websites where they have to repeat their search.

“We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” Kent Walker, Google’s general counsel, said in a statement.

The action follows a seven-year investigation prompted by scores of complaints from rivals such as US consumer review website Yelp, TripAdvisor, UK price comparison site Foundem, News Corp and lobbying group FairSearch.

The penalty payment for failure to comply would amount to around $12 million a day based on Alphabet’s 2016 turnover of $90.3 billion. The Commission did not specify what changes Google had to make.

“This decision is a game-changer. The Commission confirmed that consumers do not see what is most relevant for them on the world’s most used search engine but rather what is best for Google,” said Monique Goyens, director general of EU consumer group BEUC.

Thomas Vinje, legal counsel to FairSearch, welcomed the Commission’s findings and urged it to act on Google’s Android mobile operating system following its 2013 complaint that Google restricted competition in software running on mobile devices.

European sources said that despite the record fine, the Commission could have gone beyond it to reach ten percent of Alphabet’s annual revenue, which in 2016 was 90 billion dollars.

According to observers, the real crisis for Google and Alphabet does not lie in the 2.7 billion dollar fine, but in their reputation and credibility with users, whether for shopping or internet searches.

The Commission’s decision “underestimates the value of those kinds of fast and easy connections,” Kent Walker, Google’s general counsel, wrote in a blog post.

Some antitrust experts believe the fine levied on Google means European regulators are more likely to rein in other US technology companies such as Apple, Amazon, Facebook and Netflix as they win over more European consumers at the expense of homegrown companies.