EC fines Google record €2.4bn for anti-competitive behaviour

Google has been fined a record €2.42bn for breaching European Union (EU) antitrust rules. The European Commission (EC) levied the fine after finding that Google used its position as a leading search engine to boost its own comparison shopping services. The EC has given Google 90 days to terminate the practice or face penalties of up to 5% of the average daily turnover of Google’s parent company Alphabet. Moreover, Google could face civil action for damages by businesses affected by the anti-competitive actions. European Commissioner Margrethe Vestager, who oversees competition policy, said: "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. “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." Google set up a comparison shopping site for Europe in 2004, initially branded Froogle and now operating as Google Shopping. It allowed consumers to compare products and prices and find deals from online retailers. The EC said Google was aware that Froogle’s performance in its early years was poor compared with competitors. In 2008, the EC said Google changed strategy to push Froogle’s comparison shopping service and “relied on Google’s dominance in general internet search, instead of competition on the merits in comparison shopping markets”. The EC said comparison shopping services rely on internet traffic to generate hits and revenue. Google used its search engine to raise the position of its shopping service to the top of search results, it added. Moreover, the EC said Google “demoted” its competitors’ results. “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 said. “Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets,” it added. Google rolled out the practice of promoting its own shopping services and demoting competitors in 13 European Economic Area countries, beginning with the UK and Germany in 2008. In issuing its statement on Google, the EC said this strategy directly increased traffic to Google’s shopping site over its competitors. It found that traffic to Google’s comparison shopping site increased 45-fold in the UK and 35-fold in Germany after rolling out new algorithms to demote competitors’ results in its search engine. At the same time, the EC said traffic to certain rival shopping sites dropped off by 85% in the UK and up to 92% in Germany. The EC said it will monitor Google’s compliance with the requirement to cease anti-competitive practices within 90 days. Google will have to inform the EC of its actions within 60 days.

EC fines Google record €2.4bn for anti-competitive behaviour

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