Google Could Face Massive Fine In Europe Over Shopping Tools
Google could potentially be fined over a billion dollars in Europe over controversy pertaining to its shopping tools.
According to a report from the Financial Times, Google is bracing itself for a fine from Brussels over antitrust issues. The publication asserts that the European Commission will levy a massive fine on the company, charging it with misusing its monopoly in online search to steer customers toward Google Shopping.
The fine will amount to over €1 billion (roughly $1.12 billion), but the exact figure is currently unknown. This means that the fine would top the record penalty of €1 billion the European Commission issued to Intel in 2009 for its anti-competitive behavior.
Google To Be Fined Over A Billion Dollars?
The fine, if levied, will come after seven years of investigations by Brussels. In July 2016, the European Commission clarified that it held Google accountable for misusing its dominance in the market to promote and steer customers to Google Shopping, which shows a product's price comparison.
A Commission spokesperson declined to reveal not only the exact penalty figure but also to comment on the matter.
Since the antitrust charges were brought forward, Google's competitors and high ranking political leaders and officials in Berlin and Paris suggested that the Commission's competition commissioner Margrethe Vestager take strict action against the Alphabet-owned company.
The company defended itself by claiming that search conducted through its engine increased traffic to other shopping services like Amazon and eBay.
"Meanwhile, over those same ten years, a rapidly increasing amount of traffic flowed from our search pages to popular sites like Amazon and eBay as they expanded in Europe, hardly a sign of our "favouring" our own ads," Kent Walker, Google's general counsel, noted in a blog post.
The maximum fine that can be levied in case of a monopoly abuse is 10 percent of the entire revenue of the company involved. In this case, Alphabet's 2016 annual revenue was $90 billion. The fine amount will be calculated up to 30 percent of Google's shopping service revenue, which will be multiplied by the years this anti-competitive behavior persisted.
Google will also have to draft its future plans of operating its shopping service and submit the draft to the commission within a stipulated period. Failure to do so would incur fines of an additional 5 percent of the average daily turnover for each day of the delay.
Silicon Valley Under Investigation
The European Commission was investigating tech companies since 2000. Regulators have already looked into the activities of Amazon, Facebook, Google, Apple, Intel, and Microsoft. This led many to believe that the administrative body was specifically targeting Silicon Valley companies. The Commission denied all such claims.
After Vestager was appointed to the commission, she filed a fresh list of charges against the Alphabet-owned company, alleging Google intentionally diverted online traffic to its own shopping service. However, after hearing Google's response to these charges, the European Commission decided to cut down some from the list.
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