EU slaps Google with $2.7B fine

Google has been slapped with a record-breaking $2.7 billion fine from the European Union for manipulating shopping search results.

The European Commission found that Google failed to give users “a genuine choice” when it surfaced results pointing to its own shopping platform ahead of others. The case dates to 2010, but the decision was reached this week.

The Commission concluded that Google "gave prominent placement in its search results only to its own comparison shopping service, whilst demoting rival services. It stifled competition on the merits in comparison shopping markets."

CNBC reported:

By ranking Google Shopping service ahead of other competitors, Google was able to significantly increase the amount of traffic to the previously ailing service, thereby generating more clicks and revenue. Meanwhile, other companies were bumped down the list and saw traffic levels drop.

The EU’s top antitrust official, Margrethe Vestager, said in a statement:

What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.

Google must change the practice within 90 days or face additional fines up to 5 percent of its average daily worldwide revenue (estimated to be around $14 million per day).

CNBC reported:

EU regulatory guidelines stipulate that such fines for antitrust abuses are capped at up to 10 percent of the company's global turnover. By this measure, Google's fine could have been as much as $9 billion based on parent company Alphabet's 2016 turnover.

Though it fell short of this mark, it is well above those previously doled out by the regulator, indicating its intention to make an example of the company.

The company stopped short of admitting wrongdoing, claiming it was simply attempting to give users the best results for their search.

Kent Walker, Google’s senior vice president, issued the following statement:

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.

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Kent indicated that Google might also challenge the decision:

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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