Google fined record €2.4bn for abusing search monopoly

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Google has just lost its biggest regulatory battle!

Google has been hit with a record-breaking $2.7 billion (€2.42 billion) fine by the European antitrust officials for unfairly manipulating search results since 2008.

After a lengthy seven-year investigation that was launched in 2010 after several rivals complaint, the European Commission on Tuesday imposed this ‘biggest even financial penalty’ against the internet tech giant for breaking EU competition law.

 

The European Commission said that the search engine has 90 days to end the misconduct. If it does not, it faces penalty payments of up to 5 per cent of the average daily worldwide turnover of Alphabet, which is Google’s parent company.

“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.

“Comparison shopping services rely to a large extent on traffic to be competitive.” European Commission says in a press release.

“The evidence shows that consumers click far more often on results that are more visible, i.e. the results appearing higher up in Google’s search results. More traffic leads to more clicks and generates revenue.”

The Commission says the amount of penalty has been calculated from Google’s income from its comparison shopping service in Europe. Google’s total revenue in the year 2016 was almost $90 Billion.

Apart from the fine, the Commission has ordered Google to “stop its illegal conduct” and anti-competitive practices within the 3-month deadline or warned to face a further penalty of up to 5% of the average daily worldwide turnover of the Alphabet, Google’s parent company.”

So now Google will have to change its search ranking algorithm. However, the company can also appeal this decision in in EU courts to delay the resolution for years.

“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.” Google Spokesperson said in a statement.

Moreover, Google is currently facing two other ongoing EU antitrust investigations.

One says Google Android unfairly force cellphone manufacturers to preinstall Google services to promote its products over rivals. Another investigation targets its AdSense business.

The previous biggest antitrust fine was against U.S. chipmaker Intel in 2009, which was €1 billion.

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