EU Commission hits Google with record $2.7 billion fine over antitrust violations

midian182

Posts: 6,677   +59
Staff member

The EU Commission’s investigation into claims that Google abused its dominant market position by promoting its own shopping comparison service at the top of search results (while demoting rivals) has dragged on since late 2010. Now, European regulators have finally ruled against the company and hit it with a record fine of 2.42 billion Euros, or $2.72 billion.

In a statement, the EU Commission says Google breached EU antitrust rules by giving an illegal advantage to another one of its products – the shopping comparison service. It warns that the company must cease this conduct within 90 days or face additional penalty payments of up to 5% of Alphabet's average daily worldwide turnover. To give you some idea of how much that would be, the Google parent company's total revenue for 2016 was almost $90 billion.

The EU found that:

  • Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google’s comparison shopping service wants to show results, these are displayed at or near the top of the search results.
  • Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google’s search results on the basis of Google’s generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. Evidence shows that even the most highly ranked rival service appears on average only on page four of Google’s search results, and others appear even further down. Google’s own comparison shopping service is not subject to Google’s generic search algorithms, including such demotions.

When formally responding to the charges last November, Google said: "There is simply no meaningful correlation between the evolution of our search services and the performance of price comparison sites.”

The fine is almost double that of the largest ever previous payout in an EU antitrust case, surpassing the $1.45 billion imposed on Intel in 2009 for its anticompetitive practices. But Google’s penalty it isn’t as high as the $3.4 billion punishment some predicted it would receive last year.

Google may have received the biggest fine, but it isn’t the only US tech giant to face the wrath of the EU Commission. In addition to Intel, other targets include Microsoft, Qualcomm, Apple, Amazon, and Facebook.

The EC will be holding a press conference soon.

Permalink to story.

 

frostyshield

Posts: 87   +89
Nothing wrong with a company pushing their products first its called business, jeez you'd think the EU gov would understand that microsoft & gogole etc cant push mac os or chrome os... etc
 

Skidmarksdeluxe

Posts: 8,645   +3,289
Of course ANY company or ANY person for that matter is going to strut their stuff before considering lending a helping hand to anyone else, especially a competitor, it's seems a very natural thing to do but they were found guilty and must now pay the piper. Tough luck. 2.4 billion EU's might sound a bit excessive but it's just walking around money to Google though.
 

Uncle Al

Posts: 8,001   +6,775
Nothing wrong with a company pushing their products first its called business, jeez you'd think the EU gov would understand that microsoft & gogole etc cant push mac os or chrome os... etc

Normally I would agree with your statement; but I am haunted by the many Google claims early in their existence and just how many of those they have cast aside in their quest for the "almighty dollar" ... or in this case euro's.
 

Greg S

Posts: 1,607   +442
Not really sure why the EU is so anti-profit, but I suppose they want to take what they can't make themselves.
 

Capaill

Posts: 1,199   +743
I had to check online to find out what a shopping comparison service is, probably because my ad blocker was preventing the shopping links from showing up. The UK Business Insider article was quite informative. So, when you type in a product into Google, it shows a list of Sponsored shop links at the top or side of the page and any clicks on those shop links benefit Google. Apparently other sellers have to use aggressive SEO to move their links up to higher pages but Google's links are exempt from this. The article goes on to say:

The Commission found that Google's practices meant a huge drop in traffic for rivals once Google Shopping was introduced. Here's what it found:
An 85% drop in the UK
A 92% drop in Germany
An 80% drop in France
"These sudden drops could not be explained by other factors. Some competitors have adapted subsequently and managed to recover some traffic, but never fully," the Commission said.
Meanwhile, Google's traffic went up.
 
R

Raoul Duke

Good for the EU. You want to operate in the EU, you obey their laws. Google didn't.
"In a statement, the EU Commission says Google breached EU antitrust rules by giving an illegal advantage to another one of its products....." It's too bad given the profits Google have illegally accumulated that this is less than a slap on the wrist, or as Google would say, it's just the cost of doing business (they have made far more money than the fine so in their eyes, they are ahead of the game)
 

frostyshield

Posts: 87   +89
You're american?
British, why?

Good for the EU. You want to operate in the EU, you obey their laws. Google didn't.
"In a statement, the EU Commission says Google breached EU antitrust rules by giving an illegal advantage to another one of its products....." It's too bad given the profits Google have illegally accumulated that this is less than a slap on the wrist, or as Google would say, it's just the cost of doing business (they have made far more money than the fine so in their eyes, they are ahead of the game)


Why doesn't target advertise microdirect products or services? same goes for bing why don't they advertise googles services/products?
 

Underdog

Posts: 193   +108
Not really sure why the EU is so anti-profit, but I suppose they want to take what they can't make themselves.
They're not really anti-profit. They just want a fair deal for all. Google presents itself as a free search tool. What they actually deliver is a tool that sends the user to the site of the highest bidder. Commercialism at the very borders of deception.
 

Capaill

Posts: 1,199   +743
It's not a great leap to say that Google is anti net neutrality - as they are funnelling internet usage towards sites that financially benefit them and actively penalising those sites that do not pay them.