EU Antitrust hits Google with a record $2.7 bn fine
Google has been fined a record €2.4 billion ($2.7 billion) after EU antitrust regulators concluded the first stage of their three-pronged probe into the world's most popular search engine.
The fine, which targets the company's shopping business, is the largest doled out by Brussels for a monopoly abuse case and 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 has abused its dominance as a search engine by giving illegal advantages to another Google product, its shopping comparison service," Commissioner Margrethe Vestager, the member of the European Commission in charge of competition, told a press conference on Tuesday.
The EC says Google must end the censured conduct within 90 days or face additional penalty payments of up to 5 per cent of the average daily worldwide turnover of Alphabet, its parent company.
For some context on the size of the fine, Google’s (Alphabet’s) full year revenue for 2016 was almost $90bn. The Commission says the fine has been calculated on the basis of the value of Google’s revenue from its comparison shopping service in the 13 EEA (European Economic Area) countries concerned.
In the statement Vestager, explained: “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. 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.”
Analysts and many of Google’s competitors have called for an independent monitor to oversee the company’s digital services in Europe, which may potentially extend to tough oversight of its search algorithms, some of Google’s most important intellectual property. The search giant is likely to fiercely oppose such a remedy.
Google has other options, including the removal of some of its specialized search services from Europe, as well as returning them to how they operated before Europe’s investigation began almost a decade ago.
Whatever the outcome, analysts expect a protracted legal battle that will continue for several years as both Google and its rivals fight to define how the search giant can offer its services to Europeans and those farther afield.