Saturday 23 March 2019

Google fined 'record' €2.42bn for 'unfair' shopping searches

  • Biggest ever fine handed down by European competition authorities
  • Latest in string of findings to hit big US technology firms
  • Decision could force changes to how Google handles online shopping searches
  • Google 'respectfully disagrees' with decision and is considering appeal
Google's Dublin offices
Google's Dublin offices
Donal O'Donovan

Donal O'Donovan

The European Commission has fined Google €2.42bn for abusing its dominant market position by giving illegal advantage in search results to its own comparison shopping service.

The fine is the biggest ever handed down by European competition authorities for so-called ant-trust or market abuse.

It is the latest in a string of findings that have hit big US technology firms, including last year's €13bn Apple tax decision.

The Google fine takes into account the "gravity and duration" of the market abuse, the Commission said.

With more than $90bn in cash, Google will have no trouble paying the fine. But the decision could force Google to change the way it handles online shopping searches, a major source of advertising revenue.

"Google's practices amount to an abuse of Google's dominant position in general internet search thereby stifling competition in comparison shopping markets," the Commission said.

Fine: Margrethe Vestager. Photo: Bloomberg
Fine: Margrethe Vestager. Photo: Bloomberg

"Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals,” said Commissioner Margrethe Vestager, who is in charge of competition policy.

“Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors,” she said.

“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,” she added.

According to the Commission the result of the company's search practises means that their comparison shopping service is much more visible to consumers, appearing much higher up in the search results.

"The evidence shows that consumers click far more often on results that are more visible," the Commission said.

Google's dominance in Europe is almost total with 90pc of internet searches running through the engine.

The investigation into Google has been running since 2010 and the company has consistently denied any wrongdoing.

In a statement today the company said:

"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. We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case."

Today's decision will attract significant interest from both Governments and Silicon Valley as it is largely viewed as a test case for the future governance of growing tech giants.

Google's dominance in Europe is almost total with 90pc of internet searches running through the engine.

Two investigations are currently underway into the company to determine if its dominance is being abused. These investigation includes the Android operating system and AdSense.

More to follow...

Additional reporting by Independent News Service

Online Editors

Also in Business