The EU imposed a fine of $2.7 billion (2.4 million euros) on Google on Tuesday, June 27. The EU regulators found that Google did not follow the antitrust rules for online shopping practices. The fine set a record as being the largest fine ever imposed for a monopoly abuse case. European officials have taken a firm stand against technology companies violating antitrust regulations. The commission found that Google had given another Google product an illegal advantage. The product which was given undue advantage is Google’s shopping comparison service.
“EU antitrust rules apply to all companies that operate in Europe’s Economic Area, no matter where they’re based.”
The European Commission looked into Google’s shopping practices after they received complaints from U.S. and European competitors. The seven-year-long investigation looked into the complaints that Google unfairly used its dominance in the search engine space to give Google Shopping service an advantage over other competitors and retailers, resulting in a monopoly in the consumer and retailer space. This is the first time the search-engine giant is facing fines related to antitrust regulations and highlights a new type of anti-competitive behavior. Google was given 90 days to stop these antitrust practices or else they could face more penalties. The E.U. Commission could claim noncompliance payments from the search-engine giant, which may amount up to 5 percent of the daily global turnover of Alphabet, Google’s parent company. According to Financial Times,Alphabet shares fell 1 percent early Tuesday morning in New York.
European Commissioner Margrethe Vestager made a statement to reporters where she clarified that Google also demoted its rivals search engine results.
“But Google’s strategy for its comparison shopping service wasn’t just about attracting customers. It wasn’t just about making its product better than its rivals. Google has abused its market dominance in its search engine by promoting its own shopping comparison site in its search results and demoting its competitors.”
Google has issued a statement saying that they disagree with the findings of the commission. They also said that they would consider appealing the finding to the European Court of Justice, the highest court in Europe. Google argues that the E.U. Commission does not take into account the reality of how the average person shops online. Kent Walker, Google’s general counsel, said that people are routed to merchant websites in a variety of ways including general search engines, social media sites, and online ads. He also said that retailers can also now directly reach out to consumers in a way that was never possible before.
The regulators are not quite finished with Google yet. According to CNBC, they are currently investigating two other charges, one of which is whether the mobile operating system of Android is being used by Google to endorse other Google products which again would give them an unfair advantage.
[Featured Image by Virginia Mayo/AP Images]