EU fines Google record €2.42 billion for breaching competition rules

The European Union has fined Google €2.42 billion for breaching competition rules in online shopping service

27 June 2017, 12:23pm
EU says Google has demoted rival comparison shopping services in its search results
EU says Google has demoted rival comparison shopping services in its search results
The European Union has imposed a record €2.42bn ($2.72bn) fine on technology giant Google, for abusing its dominance as a search engine by giving
illegal advantage to its own shopping service.

The European Commission said Google had breached EU antitrust rules and abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service.

The company must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.

Google said it "respectfully disagrees” and is considering appealing the fine.

“Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But 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,” EU Commissioner Margrethe Vestager 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."

Google's flagship product is the Google search engine, which provides search results to consumers, who pay for the service with their data. Almost 90% of Google's revenues stem from adverts, such as those it shows consumers in response to a search query.

In 2004 Google entered the separate market of comparison shopping in Europe, with a product that was initially called "Froogle", re-named "Google Product Search" in 2008 and since 2013 has been called "Google Shopping". It allows consumers to compare products and prices online and find deals from online retailers of all types, including online shops of manufacturers, platforms (such as Amazon and eBay), and other re-sellers.