EU FINES GOOGLE $2.7 BILLION FOR SKEWED SEARCHES
Google lost its biggest regulatory battle yet, getting a record ^2.4 billion ($2.7 billion) fine from European Union enforcers who say the search-engine giant skewed results in its favour to thwart smaller shopping search services.
Alphabet’s Google has 90 days to “stop its illegal conduct” and give equal treatment to rival price-comparison services, according to a binding order from the European Commission on Tuesday. It’s up to Google to choose how it does this and it must tell the EU within 60 days of its plans. Failure to comply brings a risk of fines of up to 5 percent of its daily revenue.
“Google’s strategy for its comparison-shopping service wasn’t just about attracting customers by making its product better than those of its rivals,” said Margrethe Vestager, the EU’s antitrust chief. “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.”
Shares of Mountain View, California-based Google fell 1.5 percent in premarket trading in New York. They’ve risen 23 percent so far this year.
Vestager’s decision marks the end of a lengthy seven-year probe fueled by complaints from small shopping websites as well as bigger names, including News Corp., Axel Springer SE and Microsoft Corp. European politicians have called on the EU to sanction Google or even break it up while U.S. critics claim regulators are targeting successful American firms.
“I expect the Commission now to swiftly conclude the other two ongoing investigations against Google,” Markus Ferber, a member of the European Parliament from Germany. MARGRETHE VESTAGER, EU’s antitrust chief “Unfortunately, the Google case also illustrates that competition cases tend to drag on for far too long before they are eventually resolved. In a fastmoving digital economy this means often enough that market abuse actually pays off and the abuser succeeds in eliminating the competition.”
Google has been pushing its own comparison shopping service since 2008, systematically giving it prominent placement when people search for an item, the EU said. Rival comparison sites usually only appear on page four of search results, effectively denying them a massive audience as the first page attracts 95 percent of all clicks.
“As a result of Google’s illegal practices, traffic to Google’s comparisonshopping service increased significantly, whilst rivals have suffered very substantial losses of traffic on a lasting basis,” the EU said, citing figures of a 45 percent increase in traffic for Google’s service.