EU slaps Google with record 2.4 billion euro fine
Illegally favouring shopping service in search results
BRUSSELS, June 27, (AFP): The EU hit Google with a record 2.4-billioneuro fine Tuesday for illegally favouring its shopping service in search results, in a fresh assault on US firms that risks the wrath of President Donald Trump.
Hard-charging European Commission competition chief Margrethe Vestager said the tech giant “abused its market dominance” as the world’s most popular search engine to give an advantage to its Google Shopping service.
“What Google has done is illegal under EU antitrust rules,” Denmark’s Vestager told a news conference in Brussels.
“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.”
Google now has 90 days to “end this conduct” or face further fines, Vestager said. These could amount to five percent of Google’s daily revenue, she added, a penalty of roughly $14 million a day.
The fine broke the previous European Union record for a monopoly case against US chipmaker Intel of 1.06 billion euros in 2009.
Google said it “respectfully” disagreed with the EU decision, which followed a seven-year investigation, and may appeal.
“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,” Kent Walker, Google’s senior vice president and general counsel, said in a statement.
“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 will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”
Google Shopping shows the images and prices of products in response to searches about shopping when someone uses the search engine.
Brussels accuses Google of giving its own service too much priority in search results to the detriment of other price comparison services, such as TripAdvisor and Expedia.
The EU alleges that in 2008 Google embarked on a “fundamental change in strategy” by devoting top of the page priority to Google Shopping, pushing rivals further down the page.
“This decision is a game-changer,” said Monique Goyens, head of the European Consumer Organisation which was also involved in the case.
“Google’s market dominance has given the company power to decide the fate of all but the biggest online service providers -- in other words nearly every company,” said Fairsearch, a lobby of complainants, in a statement.
The verdict comes less than a year after Vestager shocked Washington and the world with an order that iPhone manufacturer Apple repay 13 billion euros in back taxes in Ireland.
The Google fine could also set an important precedent for other Google services, such as for images, news and travel that have also received complaints from rivals.
While an EU record, the amount is below the maximum possible of more than 8 billion euros or 10 percent of Google’s total revenue of $90 billion last year.
The case, launched in 2010, is one of three against Google and of several against blockbuster US companies including Starbucks, Apple, Amazon and McDonalds.
In the other Google cases, the EU is examining Google’s AdSense advertising service and its Android mobile phone software.
Vestager said “preliminary conclusions” in the Android and AdSense cases showed Google also breached EU rules.
The cases have stoked tensions with Washington and could now face the wrath of Trump, the tycoon who won office on his “America First” slogan and has previously hit out against the EU.
But Vestager denied any anti-US prejudice.
Here are the largest anti-trust fines in the EU’s history:
1. Google (2017) Brussels fines the internet giant 2.4 billion euros ($2.7 billion) as the world’s most popular search engine is caught out for giving an illegal advantage to its Google Shopping service in search results. The company has said it is considering an appeal of the ruling.
2. Intel (2009) US chipmaker Intel is hit with a fine of 1.06 billion euros after the European Commission finds that the company had offered clients price rebates to use its own computer chips in preference to those of its rival AMD. The case is still caught up in a marathon appeals process.
3. Microsoft (2004) Bill Gates’s Microsoft is given a fine of 497 million euros in March 2004 for anti-competitive behaviour. The EU also rules it must offer a version of its flagship Windows operating system without media software in Europe.
In 2008 the company saw the fine boosted by 860 million euros for failing to comply with agreed-to concessions.