Google hit with record $2.7B fine for abusing search dominance – CNET

The European Union slapped Google with a 2.42 billion euro ($2.72 billion) fine Tuesday for favoring its own shopping services in its search results over those of rivals.

If Google does not stop this practice within 90 days, its parent company, Alphabet, will be charged a further 5 percent of its average daily global turnover in additional fines, Europe’s Competition Commission said in a press conference livestreamed on Facebook.

The fine comes as a result of a seven-year investigation by the EU dedicated to finding out whether Google was giving priority to its own needs over the needs of European shoppers.

Now the results are in, and the Competition Commission has found that the internet giant systematically abuses its dominance in search to promote its own shopping services. European regulators also found that Google actively demotes rivals in its results through use of algorithms, making them less visible to consumers.

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The EU thinks Google isn’t putting the needs of shoppers first.

European Commission

“What Google has done is illegal under EU antitrust rules,” said EU Competition Commissioner Margrethe Vestager in a statement. “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.”

The fine is the biggest antitrust penalty the EU has ever applied to a single company, exceeding the $1 billion fine handed to Intel in 2009. It also far exceeds the $1.2 billion estimate that experts watching the Google case predicted.

Google defended its approach to presenting search results, saying that it disagrees with the EU’s decision and that it will consider an appeal after it reviews the details.

“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,” Kent Walker, Google’s general counsel, said in a statement. “That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.”

In addition to being a huge regulatory setback for Google, the ruling also suggests the EU is not going easy on the company — bad news, given the EU’s ongoing investigations into Android and search advertising.

In the Android case, the EU is investigating whether Google is crushing its rivals in the apps and services market by insisting Google services are preinstalled on all phones running Android. The company has also been accused of blocking rivals in online search advertising, which could potentially result in further fines for the Silicon Valley-based giant.

The Android case could conclude within the coming months, but there’s no word yet on the advertising case.

Google’s fines will be paid straight into the EU budget, helping to finance the European Union and reduce the tax burden on individuals in member states.

Originally published June 27 at 4:28 a.m. PT.

Updated at 5:24 a.m. PT:  Added Google’s statement.

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