European Commission imposes a record fine of 2.4 billion euros on Google
The European Commission has fined Google EUR 2.42 billion for favoring its own price comparison site Google Shopping in the search results of Google’s search engine.
According to Competition Commissioner Margrethe Vestager, Google has abused its dominant position in the search engine market by favoring Google Shopping in search results. According to Vestager, Google’s policy towards its own comparison shopping service was not only aimed at making the comparator better than others and thereby cutting the competition off.
Google placed the results of its own price comparator with the search results in Google, while competing price comparators were placed lower in the search results. According to the Commission, this is done automatically on the basis of a Google algorithm, with even the most popular competitive price comparison sites appearing on average only on page four of the search results. This makes Google’s own price comparator much more visible than that of competitors. This constitutes a violation of European competition rules. Individuals who claim to have suffered damage as a result of Google’s violation of the rules can apply to national courts for possible damages.
Google must end this practice within 90 days and may not engage in any other act that has the same anticompetitive effect. If Google continues to favor Google Shopping after this 90-day period, the company will have to pay a fine of up to five percent of parent company Alphabet’s daily worldwide revenue. The amount of the fine of 2.4 billion euros was calculated based on Google’s revenue generated by Google Shopping in all 31 different European countries that are part of the European Economic Area.
Google has responded to the European Commission’s decision. The company says it disagrees with the imposition of a fine. There would be no question of favoring Google Shopping. Google says it will study the decision carefully and is considering appealing the fine.
The highest fine imposed by the European Commission in a competition case to date was €1.06 billion in a case against Intel. According to recent reports from Reuters, the European Court of Justice wants to rule on Intel’s appeal against the fine in 2018.
The current case revolves around Google’s position in the search engine market. Two other Commission investigations into Google’s practices are ongoing. The European Commission filed a complaint against Google in the Android case a year ago. The complaint stated that the internet company was abusing its market position by requiring smartphone and tablet makers to pre-install Google apps, such as Search and the Chrome browser, on their Android devices. According to Google, the delivery of apps is necessary to continue investing in its operating system.
The last matter has to do with Google’s AdSense. The core of this case is that, according to the Commission, Google has infringed competition rules through its AdSense platform over the past ten years by imposing certain conditions in agreements with a limited number of large third parties. This specifically concerns search ads that are displayed after users have searched for something on websites that use a custom search engine from Google.