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Google hit with record antitrust fine of €2.4bn by Europe

Abused its market dominance as a search engine, says commission

Google was today hit with a record antitrust fine of €2.42bn (£2.1bn) from the European Union today for promoting its own shopping search service over those of smaller rivals.

The regulator found that Google had abused its market dominance as a search engine "by giving an illegal advantage to another Google product, its comparison shopping service," it said.

European regulators gave the tech giant 90 days to stop its illegal activities or face fines of up to 5 per cent of the average daily worldwide turnover of parent company Alphabet. That currently amounts to around $14m a day.

The commission has the power to fine Google's parent up to 10 per cent of its annual revenue, which was more than $90bn (£70.8bn).

Commissioner Margrethe Vestager, in charge of competition policy, said: “What Google has done is illegal under EU antitrust rules… It has denied other companies the chance to compete on their merits and to innovate, and most importantly it has denied European consumers the benefits of competition, genuine choice and innovation.”

“Most importantly, today’s decision shows that in Europe companies must compete on the merits regardless of whether they are online, the high street, and whether they are European or not.”

She said since she had taken the helm as commissioner in 2014, she has given high priority to the case. During its probe, she said the commission sifted through terabytes of data, the equivalent of 1.7 billion search queries: “It’s a lot of data and it is of course needed because our decision has to be based on firm evidence. “

She said she has no reason to believe that Google will not comply, but said the commission intended to monitor Google’s compliance closely. “This means this issue will remain on our desk for some time. “

The commission stuck its probe into Google in 2010. 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. For the UK that was from January 2008, it said.

Leveraging market dominance

The commission said it did not object to the design of Google's generic search algorithms or to demotions as such, nor to the way that Google displays or organises its search results pages: "It objects to the fact that Google has leveraged its market dominance in general internet search into a separate market, comparison shopping."

Under the ruling, regulators will also force Google to change the way it handles online shopping searches.

Google is also being investigated over claims it unfairly banned competitors from websites that used its search bar and adverts, and the commish is looking into whether it pays and limits mobile phone providers that use its Android software and Play app store.

The commission has been accused of disproportionately targeting US tech companies. Since 2000, European regulators have investigated Microsoft, Intel, Apple, Google, Facebook and Amazon.

However, a number of US companies - including Oracle - published a joint letter addressed to Vestager this week in support of penalties against Google for “anticompetitive conduct.”

"We have watched Google undermine competition in the United States and abroad"

It said: "As you near final decisions in the Shopping and Android cases, Google and its allies will no doubt continue to press through its lobbying and public relations machine the fiction that any adverse decision amounts to European 'protectionism'.

"As US based companies, we wish to go on record that enforcement action against Google is necessary and appropriate, not provincial. We have watched Google undermine competition in the United States and abroad. Google operates on a global scale and across the entire online ecosystem, destroying jobs and stifling innovation."

A Google spokesperson told The Reg: “When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products. That's why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.

"We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.” ®

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