The European Commission fined Google €2.42 billion after ruling that the internet giant “abused its market dominance as a search engine” by illegally promoting its own shopping comparison service. This is the biggest fine for a single company in an EU antitrust case, exceeding the €1.06 billion sanction handed down to U.S. chipmaker Intel in 2009.
The ruling came after a seven-year long investigation prompted by scores of complaints from rivals such as U.S. consumer review website Yelp, TripAdvisor, UK price comparison site Foundem, News Corp and lobbying group FairSearch.
Google said it “respectfully disagrees” with the ruling, and is considering an appeal.
The search giant must end the practise within 90 days or face penalty payments of up to 5 per cent “of the average daily worldwide turnover of Alphabet, Google’s parent company”. Based on Alphabet’s most recent financial report, this would amount to approximately $14 million per day.
In a statement, the EC said Google was guilty of breaching EU antitrust rules after systematically giving prominent placement to its own shopping comparison service, first launched in 2004, on its search engine. From 2008, the European watchdog said Google began to implement a fundamental change in strategy to push its comparison shopping service in European markets.
“This strategy relied on Google’s dominance in general internet search, instead of competition on the merits in comparison shopping markets,” read the statement.
Google’s actions also had the effect of demoting “rival comparison shopping services in its search results”, as the company used generic search algorithms which led to rival services appearing lower in the rankings. “As a result, Google’s comparison shopping service is much more visible to consumers in Google’s search results, whilst rival comparison shopping services are much less visible,” said the EC.
Commission Margrethe Vestager said Google’s strategy for its comparison shopping service was not just about “attracting customers by making its product better than those of its rivals”. “It denied other companies the chance to compete on the merits and to innovate. And more importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” she said.
The Commission is still investigating Google’s actions related to the Android platform, having come to the preliminary conclusion that a dominant position has been abused. This is related actions which “stifled choice and innovation” in mobile apps and services, to protect Google’s own products.
