Monday 26 February 2018

Adrian Weckler - Google €2.4bn fine analysis: 5 key things to know

(Stock picture)
(Stock picture)
Adrian Weckler

Adrian Weckler

Today, the European Commission fined Google €2.4bn for abuse of its dominant position as a search engine in giving its own shopping comparison service an unfair boost.

Here are five things about it you may have missed.

1. Google feels sore that it was charged and not Amazon.

“When the Commission asks why some comparison websites have not done as well as others, we think it should consider the many sites that have grown in this period, including platforms like Amazon and eBay,” says Kent Walker, Google’s chief lawyer in a blogpost today.

“With its comparison tools, reviews, millions of retailers, and vast range of products from sneakers to groceries, Amazon is a formidable competitor and has become the first port of call for product searches.  And as Amazon has grown, it’s natural that some comparison services have proven less popular than others.”

2. The EU isn’t finished -- it’s going after Google’s Android mobile operating system and its AdSense ad network.

“The Commission has already come to the preliminary conclusion that Google has abused a dominant position in two other cases, which are still being investigated,” said a Commission spokesman. These are “the Android operating system, where the Commission is concerned that Google has stifled choice and innovation in a range of mobile apps and services by pursuing an overall strategy on mobile devices to protect and expand its dominant position in general internet search”. The other case is AdSense, “where the Commission is concerned that Google has reduced choice by preventing third-party websites from sourcing search ads from Google's competitors”.

3. The EU says it will fine Google up to 5pc of its daily global turnover (around €13m) if it doesn’t change its systems.

After all that’s happened, we can only assume it really means it.

4. Not everyone thinks this is US v EU thing.

Oracle, Yelp and a handful of other big American companies support the Commission’s fine. They even sent a letter of support to the European Commission about it.

“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,” said the letter. “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.”

5. Google says it’s considering an appeal.

It has to, given the size of the award. But the Commission’s determination on this, and the way in which it appears to have arrived at its decision, make the chances of an appeal look slim.

“We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” says Google’s Kent Walker.

Walker’s basic argument against the Commission’s decision is that the EU is behind the technological times in its assessment of the core issues involved.

“We believe the European Commission’s online shopping decision underestimates the value of those kinds of fast and easy connections,” says Walker. “While some comparison shopping sites naturally want Google to show them more prominently, our data show that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches.

“We think our current shopping results are useful and are a much-improved version of the text-only ads we showed a decade ago. Showing ads that include pictures, ratings, and prices benefits us, our advertisers, and most of all, our users. And we show them only when your feedback tells us they are relevant. Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay.”

Online Editors

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business