The European Commission has fined Google €2.42 billion (or $2.7 billion) for taking unfair advantage of its dominance as a search engine to push its own shopping comparison service to the top of search results. Google was found to be in breach of the European Union’s (EU) antitrust rules. The company has been given 90 days to put an end to this practice, failing which it will “face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.”
Google, on the other hand, disagrees with the European Commission. A Google spokesperson told MediaNama that they “will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.” The company has also released an official statement on its blog stating:
When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products. That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both. We think our current shopping results are useful and are a much-improved version of the text-only ads we showed a decade ago. And we show them only when your feedback tells us they are relevant. Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay.
The European Commission said that since 2008:
Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google’s comparison shopping service wants to show results, these are displayed at or near the top of the search results.
Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google’s search results on the basis of Google’s generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. 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. Google’s own comparison shopping service is not subject to Google’s generic search algorithms, including such demotions.
The Commission goes on to say that:
Google introduced this practice in all 13 EEA countries where Google has rolled out its comparison shopping service, starting in January 2008 in Germany and the United Kingdom. It subsequently extended the practice to France in October 2010, Italy, the Netherlands, and Spain in May 2011, the Czech Republic in February 2013 and Austria, Belgium, Denmark, Norway, Poland and Sweden in November 2013.
Based on its investigation, the Commission also mentioned that it had “found specific evidence of sudden drops of traffic to certain rival websites of 85% in the United Kingdom, up to 92% in Germany and 80% in France.” And that “these sudden drops could also not be explained by other factors.”
Google is no stranger to allegations of being anti-competitive:
In March 2014, the Competition Commission of India (CCI) had fined Google Rs 1 crore for failing to comply with directives given by the Director General (DG) seeking information and documents. The DG was investigating a complaint filed by Bharatmatrimony in 2009 and Consumer Unity & Trust Society (CUTS) in 2012 against Google for alleged abuse of marketshare in online search and search advertising.
The aspects of Google’s business that the CCI was investigating were: Vertical search advertising, Impact of algorithm changes on search results, AdWords Policies, AdSense policies, and Google API. More on this here.