GOOGLE FINED RECORD €2.4BN BY EU OVER SEARCH ENGINE RESULTS
BRUSSELS: The European Union has handed Google a record-breaking €2.42bn (£2.14bn) fine for abusing its dominance of the search engine market in building its online shopping service, in a dramatic decision that has farreaching implications for the company.
By artificially and illegally promoting its own price comparison service in searches, Google denied both its consumers real choice and rival firms the ability to compete on a level playing field, European regulators said.
The Silicon Valley giant has 90 days to stop its illegal activities and explain how it will reform its ways or face fines of up to €10.6m a day, which equates to 5% of the average daily worldwide turnover of its parent company Alphabet.
On the back of the finding that Google is the dominant player in the European search engine market, the EU regulator is further investigating how else the company may have abused its position, specifically in its provision of maps, images and information on local services. Google is also now liable to face civil actions for damages by any person or business affected by its anticompetitive behaviour.
As the EU official in charge of competition policy, commissioner Margrethe Vestager, spelled out the case against Google, she denied accusations that Brussels had a bias against US firms, claiming the tech giant had been guilty of an “old school” form of illegality.
“Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing,” Vestager told reporters, as she announced the fine, the largest ever made in an antitrust case. “But Google’s strategy for its com- parison shopping service wasn’t just about attracting customers by making its product better than those of its rivals.
“Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.
“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 con- sumers a genuine choice of services and the full benefits of innovation.”
In the wake of the announcement, shares in Alphabet fell 1.5% in premarket trading in New York. Vestager brushed off suggestions that the move could harm transatlantic relations, adding that the EU was not willing to give Google a “free pass”.
She confirmed, however, that the EU regulator had stopped cooperating with the US Federal Trade Commission when it decided not to pursue charges in 2013. Google immediately rejected the findings, and signalled its intention to appeal, in an indication of the gruelling legal battle to come between the two sides. A company spokesman said: “When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products.
“That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.
“We respectfully disagree with the conclusions announced today (Tuesday). We will review the commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”