EU fines Google record $2.7 bn for abusing search monopoly

EU fines Google record $2.7 bn for abusing search monopoly

The EU antitrust chief said Google had illegally taken advantage of its juggernaut position in the world of search engines, pushing users toward its comparison shopping service and advertisers over those of rivals. The company has exploited its power by having its own shopping comparison amenities in its search results.

“The Commission confirmed that consumers do not see what is most relevant for them on the world’s most used search engine but rather what is best for Google“, said Monique Goyens, director general of European Union consumer group BEUC.

“It has denied other companies the chance to compete on the merits and to innovate and, most importantly, it has denied European consumers the benefits of competition, genuine choice, and innovation”, said Vestager.

The European Commission, which polices EU competition rules, alleges Google elevates its shopping service even when other options might have better deals. Google began to implement a fundamental change in strategy in 2008. Those fees could be as high as 5 percent of the average daily worldwide turnover at Alphabet, Google’s parent company.

Europe’s investigation did not present any concrete evidence that consumers had been financially damaged by Google’s online shopping tactics, said Pablo Ibanez Colomo, a law professor at the London School of Economics.

“We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case”, he said. And there are plenty of search tools – from Camelcamelcamel, which tracks Amazon prices over time, to eBates, a shopping portal that offers coupons and cash back from 2,000 online retailers.

Consumer Watchdog was among those who had formally complained to the European Commission about Google’s anticompetitive practices and provided a study showing how Google’s shopping service hurt consumers.

Senior Vice President Kent Walker argues that users favoured Google’s results because they were quicker and easier to manage.

But the penalty is likely to leave a bigger dent in Google’s pride and reputation than its finances. Parent company Alphabet Inc. has more than $92 billion (82 billion euros) in cash, including almost $56 billion (50 billion euros) in accounts outside of the U.S.

Even so, Europe’s crackdown is unlikely to affect Google’s products in the US or elsewhere. USA interest groups were quick to latch onto the European ruling to argue that a similar approach be taken in the United States.

“As a result, competitors were much less likely to be clicked on”, she said. “U.S. lawmakers and regulatory authorities, by contrast, have been “asleep at the switch” for far too long”.

Google and its allies will no doubt continue to press through its lobbying and public relations machine the fiction that any adverse decision amounts to European protectionism”, said the letter.

Google is still under investigation in two other cases.

The fine, equivalent to 3% of Alphabet’s revenue, is the biggest regulatory setback for Google, which settled with United States enforcers in 2013 without a penalty after agreeing to change some of its search practices. In a similar probe, the U.S. Federal Trade Commission examined nine million pages of documents.