Google just got a record-breaking 2.4 billion euro ($2.7 billion) fine from European Union watchdogs for manipulating search results in the detriment of smaller shopping search services.
The fine follows an extensive seven-year investigation into allegations that Google took advantage of its internet search monopoly to thwart smaller rivals. The European Commission finished its investigation and concluded that Google abused its dominance as a search engine by illegally favoring its own comparison shopping service. Consequently, the EC issued a record fine.
EU Gives Google Ultimatum To Stop Illegal Conduct
Google has a 90-day period to "stop its illegal conduct" and ensure that rival services get equal treatment, according to the EC. The Commission left it up to the company to decide how it wants to do this, provided that it details its plans to the EU within 60 days. Should Google fail to comply, it risks further fines of up to 5 percent of its daily revenue.
"What Google has done is illegal under EU antitrust rules," says commissioner Margrethe Vestager, the EU's antitrust chief in charge of the competition policy. "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."
Smaller shopping websites such as Axel Springer SE and News Corp., as well as larger companies such as Microsoft, had complained about Google's abusive practices, which prompted the investigation.
Google's own comparison shopping service has been operating since 2008 and its placement gradually became more prominent when users searched for an item, says the EU. Meanwhile, rival comparison sites offering similar services don't appear until the fourth page of search results. Since the first page gets 95 percent of all clicks, this practice essentially robs rival sites of a huge audience.
Google's Response To EU Fine
In a separate blog post in response to the EU antitrust fine, Google SVP and general counsel Kent Walker says the company does not agree with the conclusions of the investigation and is considering a court 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," says Kent. "That's why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both."
Kent adds that in Google's opinion, the EC's decision underestimates just how much those connections matter. He adds that Google's data shows that users typically prefer links that lead them to the actual products they're searching for, rather than to websites where they have to conduct the search again.
Regulators will continue to keep an eye on how Google handles the order, and Vestager says the case will likely be of interest for several years. Vestager adds that Google needs to find its own way to comply with the order, but it must comply nonetheless. Lastly, the commissioner says the EU might need to look more closely into Google's practices regarding travel, maps, and restaurant reviews as well.