The European Commission has fined Google €2.42 billion ($2.7bn), a record amount, for breaching its antitrust rules. It deemed the company has abused its power as the world’s leading search engine, by manipulating results to favor its own online Shopping platform.
Google must end the practice within 90 days “or face penalty payments of up to 5% of the average daily worldwide turnover” of Alphabet, its parent company. That would total around $14m according to the company’s most recent financial reports.
European commissioner for competition Margrethe Vestager acknowledged in a statement that, “Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing.
“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,” she added. “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.
“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.”
A Google spokesman “respectfully disagreed” with the commission’s ruling, adding, “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.”
The spokesman added that Google will consider an appeal, and is looking forward to continuing making its case to Brussels.
Google’s Shopping platform allows for companies to pay for listings to be positioned ‘above-the-fold’, a newspaper term meaning anything seen above where the paper is traditionally folded. Translated to a screen–whether on a fixed or mobile device–this means users may only initially see the sponsored content, and not traditional advertising lower down.
The European Commission has been investigating Google Shopping for seven years. Others to have fallen foul of its regulators include Microsoft, Qualcomm and Facebook, which was fined €110m ($124m) earlier this year for lying about matching profiles on Facebook with those on its WhatsApp messaging service.