Europe versus Google: EC applies record-breaking £2.1 billion anti-trust fine

Europe versus Google: EC applies record-breaking £2.1 billion anti-trust fine

The fine handed to Google is a significant hike of the previous record penalty of 1.06 billion euros (£937 million) dished out by the commission to United States microchip firm Intel in 2009.

Google has been fined a record £2.1bn by the European Commission after a seven-year investigation into its Shopping search comparison service. It found that the abuse of dominance started in the respective country from the moment Google began prominently displaying its comparison shopping service, whilst demoting rival services.

The search engine has been given 90 days to stop favouring its own shopping service or face a further penalty of up to 5% of Alphabet’s average daily global turnover.

In a statement to the media, Margrethe Vestager, European Competition Commissioner said, “What Google has done is illegal under EU antitrust rules”. 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.

Brussels accuses Google of giving its own online service, Google Shopping, too much priority in search results to the detriment of other price comparison services, such as TripAdvisor and Expedia. Today’s judgement also opens up the possibility of other companies to take civil action suits against Google. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation, she added.

Given the impact of the EU’s investigation and the fact that it affects Google’s core business, the company is likely to appeal the decision.

A Google spokesperson responded: “When you shop online, you want to find the products you’re looking for quickly and easily”, a spokesman said in response to the ruling.

The EU’s allegations strike at the heart of a type of online advertising known as Product Listing Ads, or PLAs, that is growing at nearly three times the rate of traditional text-based search ads, according to digital marketing firm Merkle Inc. In a statement the company said: “We respectfully disagree with the conclusions announced today”.

Google has become a short cut to buying, not a short cut to saving money”, said Benjamin Glaser, features editor of DealNews, a comparison shopping site.

Gmail has more than 1.2 billion users, and the company said it would “keep privacy and security paramount as we continue to innovate”.

It is also investigating the company’s ad placing service, AdSense.

Google has been gut-punched by the European Commission for abusing its search monopoly to squeeze out other players on the Web.

Given Google’s dominance in general internet search, its search engine is an important source of traffic for comparison shopping services.

Google is also facing two other European Union antitrust investigations – one for its AdSense business and another for the deals it makes with Android phone manufacturers.