Google’s Giant Fine: The Search Giant Slapped with $2.7 Billion Antitrust Fine
Google fined $2.7 bn (£2.1bn) by the EU.
The European Union regulators have hit Google with a $2.7 billion fine over abuse of search dominance.
Specifically, The EU alleges that the search engine giant abused its power by promoting its Shopping comparison service at the top of search results pages.
In addition to the hefty fine (which happens to be the largest penalty by the regulator to date), Google has been ordered to end its anti-competitive practices within 90 days or attract a further penalty.
While Google has stated that it will appeal the ruling, failure to make recommended changes could subject it to a 5% payment of daily earnings of its parent company, Alphabet. This could mean $14 million a day based on the company’s most recent financial report.
About Google Shopping
Google Shopping is a Google product that displays images of relevant products, their respective prices, and the name of shops they are available. Other information could include review scores.
Merchants can upload a product to their Google Merchant Center account so that their products can appear in search results.
The items are sponsored meaning that they are not normal search results.
The Shopping service usually dominates the above the fold space and, sometimes, it may mean that other results may not be visible unless users scroll down.
What EU Says
EU says that it has been investigating Google Shopping for over a seven-year period. This investigation began after several complaints were tabled by Microsoft and other giant companies.
Google is being accused of denying other companies a chance to compete fairly. In addition to this, the search engine giant has been accused of denying European consumers the benefits of “competition, genuine choice, and innovation”.
Given that Shopping items appear as the above-the-fold content, Google is seen a making a conscious decision to determine what users read, use and buy online.
European Union’s Competition Commissioner Margrethe Vestager said that what Google has done goes against EU antitrust laws.
Vestager added that this case could act as the benchmark that will determine how cases relating to complaints about Google prominence will be handled.
The commission says that while the $2.7 billion Google fine may take the spotlight, Google’s illegal practices should take center stage as they as far more important in the case.
Google has been given the autonomy to determine what changes should be made to its Shopping service.
What Google Says
Google has “respectfully” disagreed with the commission’s ruling and plans to appeal. The search giant says that before that, it will review the conclusion made by the commission.
In its defense, Google says that its goal is to show ads in ways that benefit both the buyer and sellers.
Google is not the only tech giant that has faced fines for “violating” antitrust laws. In May this year, Facebook was fined for misleading officials about its takeover of Whatsapp.
Amazon has also been forced to change its distribution agreements with e-book publishers so as to be on the good side of antitrust regulators.
Currently, Apple is fighting a ruling to repay back taxes amounting to $14.7 billion to the Irish government.
Nike and Comcast are currently being investigated on grounds that they have violated antitrust laws.
Despite the apparent pattern, the Commission has denied claims that it has a bias towards American companies.