European Union Fines Google a Whopping $2.73 Billion for Abuse
The European Union (EU) is fining Google €2.42 billion ($2.73 billion) for abusing its dominant position in the search engine market to promote its own comparison shopping service. The penalty is more than twice the €1.1 billion ($1.2 billion) fine that had been expected. It also dwarfs the largest monopoly fine to date, a €1.06 billion ($1.9 billion) fine against Intel in 2008.
The company has also been ordered to cease its behavior with regard to its comparison shopping service within 90 days or face additional fines of up to five percent of parent company Alphabet’s worldwide daily revenues. The decision comes as the result of a multiyear investigation into the company’s business practices in the European market.
With Market Dominance Comes Special Responsibility
According to the European Commission (EC), the executive arm of the EU, Google systematically gave prominent placement to its own comparison shopping service over the results of competitors. The service, launched in 2008 in European markets, relied on Google’s dominance in the Internet search market to make up for its weakness among competing comparison shopping services.
The EC also found Google guilty of demoting its rivals in its search results. According to the commission, the company included a number of criteria in its search algorithms specifically designed to demote its rivals.
"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," the EC stated in a statement. "Google's own comparison shopping service is not subject to Google's generic search algorithms, including such demotions."
As a result, Google's service was given much more visibility on its search results relative to its competitors. The commission found this preferential behavior gave Google a significant advantage relative to its rivals, a breach of EU antitrust rules. While market dominance is not illegal under EU antitrust laws, companies that are found to have a dominant position are subject to a "special responsibility" not to abuse their positions to stifle competition.
A Sign of Things To Come
As a result of the ruling, Google will now be forced to give equal treatment to its rivals as well as its own comparison shopping service within its search results. For its part, Google has said it disagrees with the commission's finding and is considering appealing the case.
The decision may also represent a sign of things to come on future rulings. The EU has two other investigations currently open into Google's business practices in other services: one involving its Android operating system and another concerning its AdSense service. In both cases, the commission has already reached a preliminary finding that Google has abused its dominant position to give itself an illegal advantage over its competitors.
The ruling also opens the possibility of further legal action against Google by competitors claiming to have been injured by the Internet giant's business practices. That could spell tough times ahead for the company, at least when it comes to its EU businesses.