Google has received a fine of EUR 2.42 billion from the European Commission for abusing its dominant position in the search market and favouring its own comparison shopping service over other providers. The Commission first started investigating in 2010, and in 2015 brought formal charges against Google for violating EU competition law.
The US-based company has repeatedly denied the charges, saying it faces a number of growing competitors in comparison shopping. Google's general counsel Kent Walker repeated that the company "respectfully disagrees" with the EC's assessment and will consider an appeal against the fine.
The EU fine is based on violations in 13 countries, going back to 2008 when Google first started promoting its shopping service in the UK and Germany. The company must end the offending practices within 90 days or face additional penalties of up to 5 percent of the average daily worldwide turnover of Alphabet, Google's parent company.
The original case stemmed from complaints from Google competitors that claimed their services featured much lower in Google search results than Google's own shopping services. The EC's investigation found that Google's algorithms demote rival comparison shopping services in the search results, with even the most highly ranked rival service appearing on average only on page four of Google's search results. Google's own comparison shopping service is not subject to the same search algorithms. Given Google's over 90 percent share of the search market in all EU countries, this constitutes an abuse of a dominant market position under EU law.
To avoid further penalties, the EC ordered Google to give equal treatment to rival comparison shopping services. This means it must apply the same processes and methods to position and display rival comparison shopping services in its search results pages as it gives to its own comparison shopping service.
This is only the first of three cases in which the European Commission has found that Google abused a dominant position. It's also still investigating the company's role in the Android operating system and its AdSense platform, amid concerns it could be reducing choice and excluding competitors from the market. The Commission said it's also looking at Google's treatment in its search results of other specialised Google search services.
The Computer and Communications Industry Association, a lobby group which counts Google among its members, said the EC's fine against Google will have a "chilling effect on innovation". In a statement, the CCIA questioned the EC's analysis, suggesting a court appeal could find a "broader view of the online shopping market" was needed to assess any anti-competitive behaviour.
It noted further that all search engines employ Google's practice of providing direct answers to search queries and this "is unquestionably a product improvement" - something "courts and competition authorities around the globe have found that there are procompetitive justifications for". The CCIA said the EC's case seemed to focus on "competitors who disagree with Google competing on the merits", while not showing any evidence of consumer harm.
Google's general counsel Walker pointed out that Google was giving consumers and advertisers what they wanted - a direct link to products rather than having to repeat searches on another site. "Our ability to do that well isn’t favoring ourselves, or any particular site or seller--it’s the result of hard work and constant innovation, based on user feedback," Walker said. He also suggested that the EC had looked at too narrow a market, not taking into account major competitors such as Amazon and Ebay, which may also be overshadowing small comparison sites.
