EU hands Google record €2.4bn fine

Online shop­ping ser­vice ar­ti­fi­cially pro­moted at ex­pense of ri­val sites

The Guardian Weekly - - International news - Daniel Bof­fey Brus­sels

The Euro­pean com­mis­sion has handed Google a record-break­ing €2.42bn ($2.75bn) fine for abusing its dom­i­nance of the search mar­ket in build­ing its online shop­ping ser­vice, in a de­ci­sion that has far-reach­ing im­pli­ca­tions for the com­pany.

By ar­ti­fi­cially pro­mot­ing its own price com­par­i­son ser­vice in searches, Google de­nied con­sumers real choice and ri­val firms the abil­ity to com­pete on a level play­ing field, Euro­pean reg­u­la­tors said. The Sil­i­con Val­ley gi­ant was given 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.

The com­mis­sion’s de­ci­sion, fol­low­ing a seven-year in­quiry into Google’s dom­i­nance in search and smart­phones, sug­gests the com­pany may need to fun­da­men­tally re­think the way it op­er­ates. It is also now li­able to face civil ac­tions for dam­ages by any per­son or busi­ness af­fected by its anti-com­pet­i­tive be­hav­iour.

As the EU of­fi­cial in charge of com­pe­ti­tion pol­icy, 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 said, as she an­nounced the fine, the largest ever made in an an­titrust case. “But Google’s strat­egy for its com­par­i­son 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.”

Google re­jected the com­mis­sion’s find­ings, and sig­nalled its in­ten­tion to ap­peal. A 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. We will re­view the com­mis­sion’s de­ci­sion in de­tail as we consider an ap­peal, and we look for­ward to con­tin­u­ing to make our case.”

Vestager said Google had en­tered the shop­ping com­par­i­son mar­ket in 2004 with a ser­vice called Froogle which al­lowed its users to com­pare prod­ucts and prices online. Within two years the com­pany knew it was strug­gling, she said. From 2008, Google be­gan to im­ple­ment, ini­tially in the UK and Ger­many, and then far­ther afield, a fun­da­men­tal change in strat­egy. Ac­cord­ing to an anal­y­sis of around 1.7bn search queries, Google’s search al­go­rithm was con­sis­tently giv­ing prom­i­nent place­ment to its own com­par­i­son shop­ping ser­vice to the detri­ment of ri­val ser­vices.

Vestager … de­nied anti-Google bias

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