Google Shopping is changing to avoid new EU fines

7 years ago - Published in Finance, Fiscal & Legal

Three months after it was fined €2.4 billion by the European Commission for abusing its position on its online shopping service, Google is changing its website to comply with the Commission's demands and avoid a new penalty.
On Thursday morning (28 September), the US company's shopping service will treat its own ads the same way as ads from external services.

The change will apply in the 31 countries of the European Economic Area (EEA) – the EU-28, plus Norway, Iceland and Lichtenstein.

Google Shopping will also operate as a separate business, seeking to make a profit, albeit it will continue to be part of Google’s parent company, Alphabet.

Its ads will appear at the same place and under the same conditions, through a system of auction, as ads from external price comparison services.

The tech giant was forced to make the change after the European commission ruled in June that it had been artificially and illegally promoting its own price comparison service in searches, denying consumers real choice and rival firms the ability to compete on a level playing field.

Google was set a deadline of 28 September to change its practices, or face huge daily fines. The company is appealing against an initial €2.4bn fine tabled by the commission last June as a consequence of the ruling. 

The Commission gave Google 90 days to change its site and ensure equal treatment of all services, or face a penalty of up to 5 percent of its average global turnover.

It gave no guidelines and said that is was up to Google to come up with a solution based on the principle of equal treatment for all shopping services.

"We're implementing a remedy to comply with the European Commission's recent decision," Google said in a statement on Wednesday.

The firm added that Google Shopping "will compete on equal terms and will operate as if it were a separate business, participating in the auction in the same way as everyone else."

Google informed the Commission at the end of August about the changes and started to work with a dozen comparison services.

The European Commission said it would be "premature at this stage" to comment on whether Google's moves would be sufficient to avoid fines. EU antitrust chief Margrethe Vestager on Wednesday said her office would "actively monitor" Google's compliance with the order, adding that the company would have to report on its compliance every fourth month. "It is for Google to show that they live up to the decision," Ms. Vestager said.