Europe shakes down Google to the tune of €2.42 billion for search bias

Internet giant Google has received its anticipated spanking from the European Commission, but the fine is significantly larger than expected.

Earlier this month the word on the street was that Google was likely to get fined around €1 billion for abusing its dominant position in search by favouring its own shopping comparison service in some search results, so the eventual fine of €2.42 billion is a fair bit more. As ever with the EC this case has been dragging on for a while, but having made its mind up there’s probably not much Google can now do about it.

“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. “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.

“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.”

In its rationale the EC said that when Google first got into the shopping comparison game with Froogle back in 2006 it was a bit rubbish so, in European markets at least, it decided to push its service via the market-dominant search engine. “Google has systematically given prominent placement to its own comparison shopping service,” says the ruling, adding “•Google has demoted rival comparison shopping services in its search results.”

Most of the rest of the announcement dwells on how exhaustive the investigation was and how it arrived at the final fine amount. It seems that Google is still committing this ‘illegal conduct’ and the EC has given it 90 days to pack it in or face fines of up to 5% of the daily turnover of its holding company Alphabet. If you’re still having trouble getting your head around what Google is being fined for the EC produced the handy graphic below.

In his response to the fine Google General Counsel Kent Walker tried to plead altruism and that Google only ever had the interests of end users in mind. Even if we accept that claim at face value, empowering the consumer has been enormously profitable for Google – to the tune of around $20 billion in 2016. Google will probably appeal but it’s unlikely to win and, as the UK is currently discovering, Europe is not currently inclined to give ground.