Google hit with record fine after ‘abusing dominance’ online

27 Jun 20176 Shares

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Google. Image: turtix/Shutterstock

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Google’s digital might has not protected it from the EU, with a record €2.42bn fine issued by the European Commission.

At more than double the EU’s previous record fine (€1.06bn from Intel in 2009), Google’s fingers have been seriously burned by today’s (27 June) European Commission (EC) ruling.

Slamming the tech giant for “abusing dominance as a search engine by giving [an] illegal advantage to [its] own comparison-shopping service”, further penalties could follow.

Tick tock, Google

Google now has 90 days to end this practice, otherwise it faces fines of up to 5pc of the average daily worldwide turnover of Alphabet, its parent company.

Margrethe Vestager, the European competition commissioner, lauded Google for the “innovative products and services” that it has created to make a positive difference to our lives.

However, she added: “Google’s strategy for its comparison-shopping service wasn’t just about attracting customers by making its product better than those of its rivals.

“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.”

Calling this illegal under EU antitrust rules, Vestager said Google essentially 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.”

Complaints galore

The action came after an investigation that stretched into its seventh year, following complaints from the likes of Yelp, TripAdvisor and Foundem, all of which are price-comparison rivals.

Google’s dominance as a search engine – the EC cited figures in the 90pc range across the EU – meant it had the opportunity to dictate which price-comparison tools featured most prominently.

The EC found that its ‘Google Shopping’ tool has subsequently been boosted, contrary to how it ranks rival services.

“This means that by giving prominent placement only to its own comparison-shopping service and by demoting competitors, Google has given its own comparison-shopping service a significant advantage compared to rivals,” reads the EC’s statement.

The record fine of €2,424,495,000 takes into account the duration and gravity of the infringement, and was calculated “on the basis of the value of Google’s revenue from its comparison-shopping service in the 13 EEA countries concerned”.

Google. Image: turtix/Shutterstock

Gordon Hunt is senior communications and context executive at NDRC. He previously worked as a journalist with Silicon Republic.

editorial@siliconrepublic.com