Google hit with EU fine

Los Angeles Times - - COMPANY TOWN - As­so­ci­ated press

The Euro­pean Union slapped a record $2.7-bil­lion fine on In­ter­net gi­ant Google on Tues­day for al­legedly tak­ing ad­van­tage of its dom­i­nance in on­line searches to di­rect cus­tomers to its own on­line shop­ping busi­ness.

Euro­pean reg­u­la­tors gave the Moun­tain View, Calif., com­pany 90 days to stop or face more fines of up to 5% of the aver­age daily world­wide rev­enue of its par­ent com­pany, Al­pha­bet Inc.

Google says it is con­sid­er­ing an ap­peal.

The Euro­pean Com­mis­sion, which po­lices EU com­pe­ti­tion rules, al­leges that Google el­e­vates its shop­ping ser­vice even when other op­tions might have bet­ter deals.

The com­mis­sion said Google “gave prom­i­nent place­ment in its search re­sults only to its own com­par­i­son shop­ping ser­vice, whilst de­mot­ing ri­val ser­vices. It sti­fled com­pe­ti­tion on the mer­its in com­par­i­son shop­ping mar­kets.”

“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,” EU Com­pe­ti­tion Com­mis­sioner Mar­grethe Vestager told re­porters.

Google says it's just try­ing to pack­age its search re­sults in a way that makes it eas­ier for peo­ple to find what they want.

“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,” said Kent Walker, se­nior vice president at Google.

“We will re­view the com­mis­sion's de­ci­sion in de­tail as we con­sider an ap­peal, and we look for­ward to con­tin­u­ing to make our case,” he said.

The fine is the high­est ever im­posed in Europe for anti-com­pet­i­tive be­hav­ior, ex­ceed­ing a 1.06-bil­lion-euro penalty on Sil­i­con Val­ley chip maker In­tel in 2009.

But the penalty is likely to leave a big­ger dent in Google's pride and rep­u­ta­tion than its fi­nances. Al­pha­bet has more than $92 bil­lion in cash, in­clud­ing nearly $56 bil­lion in ac­counts out­side of Europe.

Vestager said the com­mis­sion's probe, which started in 2008, looked at some 1.7 bil­lion search queries. In­ves­ti­ga­tors found on aver­age even Google Shop­ping's most highly ranked ri­vals only ap­peared on Page 4 of Google search re­sults. Vestager said 90% of user clicks are on Page 1.

“As a re­sult, com­peti­tors were much less likely to be clicked on,” she said.

It is up to Google to de­cide what changes it wants to make to com­ply with the com­mis­sion's rul­ing, but any rem­edy must en­sure that ri­val com­pa­nies re­ceive the same treat­ment as Google Shop­ping.

“We will mon­i­tor Google's com­pli­ance closely,” Vestager said.

She noted that any com­pany or per­son who has suf­fered dam­ages due to the com­pany's prac­tices can make claims to na­tional courts.

More broadly, Vestager said, the probe has es­tab­lished that Google is dom­i­nant in gen­eral In­ter­net search in all 31 coun­tries of the Euro­pean eco­nomic area. This will af­fect other cases the com­mis­sion might build against the In­ter­net gi­ant's var­i­ous busi­nesses, such as Google Images.

She also noted that reg­u­la­tors are mak­ing “good progress” in their other Google probes into An­droid and search ad­ver­tis­ing, and that the “pre­lim­i­nary con­clu­sion” is that they breach EU an­titrust rules.

The com­mis­sion has come un­der fire in the United States for a per­ceived bias against U.S. com­pa­nies.

Vestager said she has ex­am­ined statis­tics con­cern­ing an­titrust, merger con­trol and state aid de­ci­sions and that she “can find no facts to sup­port any kind of bias.”

Al­pha­bet shares fell $24, or 2.5%, to $948.09 on Tues­day.

Vir­ginia Mayo As­so­ci­ated Press

COM­PE­TI­TION COM­MIS­SIONER Mar­grethe Vestager dis­cusses the Euro­pean Union’s record $2.7-bil­lion fine against Google dur­ing a news con­fer­ence at EU head­quar­ters in Brus­sels on Tues­day.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.