Google Fined €2.42B by European Commission for Antitrust Violations
by Ryan Smith on June 27, 2017 8:00 AM EST
This morning Google has become a new record holder in the European Union; unfortunately however it’s not a good record to hold.
Capping off a multi-year investigation, the European Commission – the EU’s executive body – has ruled that Google has violated the EU’s antitrust laws with the company’s shopping service and how it is promoted. As a consequence of this ruling, the EU is levying a €2,424,495,000 (~$2.73B) fine against Google, along with requiring the company to cease anti-competitive activities in the next 90 days under threat of further fines. This fine is, in turn, now the largest antitrust fine ever levied by the EU, easily surpassing Intel’s €1.06bil fine in 2009.
The EU has been investigating Google for several years now – and indeed hasn’t been the only body to do so over the years – and based on how the investigation was proceeding, it has been expected for some time now that the European Commission would rule against Google. Overall, the Commission bases the size of the fine on the revenue of the offending business – in this case Google’s shopping comparison service – where it can levy a fine at up to 30% of revenue over the offending period of time. So while Google’s fine is quite large, it also represents an equally significant amount of time – over 9 years in the case of Germany and the UK.
From an antitrust standpoint, the crux of the Commission’s argument has been that Google has leveraged their dominance of the search market to unfairly prop up and benefit their search comparison service. Specifically, that in their search results Google listed their own shopping service and its results ahead of competing services, severely harming competitors, who saw traffic drops of up to 92% depending on the specific country in question.
For the time being, Google has 90 days to fix the issue. The Commission isn’t recommending a specific remedy, but they expect Google to pick a reasonable remedy and to explain it to the Commission. Ultimately what regulations are looking for is that Google give competitors “equal treatment” – that is, that competing shopping comparison services receive equal footing in Google’s search results, following the same methods and processes that Google uses to place their own service. Should Google not comply, then the Commission has the option of levying a further fine of 5% of all of Alphabet’s global daily turnover.
Meanwhile Google has the option of appealing the ruling to the courts, and while they’ve yet to make a decision, they’ve already published their own rebuttal to the Commission’s ruling, indicating that an appeal is likely. In their rebuttal, Google has stated that “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.” The company has also noted that they do have competition, particularly from companies like eBay and Amazon.
Finally, along with today’s ruling, the European Commission has also noted that they still have other, ongoing cases against Google that they are continuing to investigate. These include issues over 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” – and Google’s AdSense unit, where there are concerns over Google’s policies have reduced choice in the ad market. As a result, even if Google doesn’t appeal today’s fine, their legal wrangling with the EU is not yet over.
Source: European Commission
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T1beriu - Tuesday, June 27, 2017 - link
Are you ok?philehidiot - Tuesday, June 27, 2017 - link
This is just another way of generating funds and the appeals process is an appeal to a borderline corrupt, biased judiciary which has judged on their own pay before now.I do not understand why, if you create a business which provides a product that is so good no one else can come close and everyone uses it, why you may not promote your own services through your own business. They made the effort to create their product and now they're being told on their own website that they must place competitors products side by side with their own. It's common business practice to not advertise your competitors products and this is what everyone else does... but no, when the EU decides you're too big then you must change practice and start promoting your competitor's products also.
Seems mental to me. I get they're trying to stop an impenetrable monopoly but frankly talks and negotiation is the way forward, not massive fines which are frankly a pittance to a company of this size. All it does it stop companies wanting to grow too big in case the supranational governments decide to move the goal posts.
As stated already, the EU is just a lobbying organisation on this level. They've screwed over so many industries (such as bottled water - only the giants survived that one) due to lobbying by businesses which can afford to schmoose these people and take them to many an agreeable lunch.
highlnder69 - Tuesday, June 27, 2017 - link
If I was Google, I would tell them to kiss my a$$. Since when is anyone forced to use Google as their search engine?Cellar Door - Tuesday, June 27, 2017 - link
And face and operating ban - loose all that region to MS. Wow - lets hire this guy, he really knows how to run a business.damianrobertjones - Tuesday, June 27, 2017 - link
Google are sneaky. You know it, I know, it's also obvious. Sneaking in installs via Java, Flash and more. Before the standard consumer knows it they're using Google Chrome and the search is Google. They might not have asked for it but they've got it.Naughty Google!
BrokenCrayons - Tuesday, June 27, 2017 - link
I wouldn't call out Alphabet for the bundled Chrome installer with Java and Flash. Adobe and Oracle develop those products and have the option of excluding them if either company decided to do so. Yes you can blame Alphabet for such creepy software existing in the first place, but the unassuming looking installer add-ons are the responsibility of other businesses.BrokenCrayons - Tuesday, June 27, 2017 - link
Quite a few people will respond to the EU's decision with unthinking brand loyalty. Conversely, they may cheer on the fine because they oppose Alphabet's idea of gathering and mining data for advertising purposes. I think the people behind the decision to fine Alphabet are doing so without as much of that bias and witha healthy dose of maturity not seen in the comments section of a tech site's news article.Alexvrb - Tuesday, June 27, 2017 - link
I oppose Alphabet's advermining empire, and often point out that a business whose revenue is 90% advertising should not be trusted with data that you do not wish sold/marketed. But I oppose this EU action against GOOGL. The people behind the decision to fine them ARE biased, biased in favor of cash. Corruption, not protection. Your crayons may be broken but your horse is still standing tall.DanNeely - Tuesday, June 27, 2017 - link
I'm curious which product searches Google's accused of actually harming. For semi obscure to very obscure tech products there were several finder services that used to show up in the top 10 of search results until a few years ago. They universally displayed pages that stated "we can't find an Foo with any of our partners" if I clicked through; initially in optimism, eventually only when I wasn't paying attention. If Google killed these scammers good riddance.If it's the airline search companies whining about google's relatively recent flight search. Until they can return results in 1 second instead of the 10 to 30 seconds they somehow seem to consider acceptable, they deserve to be flushed from any but the most complex flight searches which Google can't do yet because their user experience is so awful. And as for the company that's bought up several previously independent flight search sites and turned them all into minimally skinned versions of the same thing; the best thing Google could do to improve third party results is to only show one of the sites instead of letting them deceive their way into 3 or 4 slots on the first page.
Strunf - Tuesday, June 27, 2017 - link
It's not about a product in particular, it's just that when you search for a product Google shopping will be shown right away while all the other shops will be far in the list. Google is pushing its Google shopping up in the list despite others shops be far more relevant.