Google Gets Record $2.7 Billion EU Fine for Skewing Searches


The decision is the first of a series of competition rulings that Google faces from the European Commission, which has not shrunk from taking on USA tech giants such as Alphabet, which has annual revenues of US$90 billion and a market value of US$665 billion.

/PRNewswire-USNewswire/ Consumer Watchdog today called on US antitrust regulators to act against Google's anticompetitive practices in the wake of the European Commission's record $2.7 billion fine against Google for violating antitrust law and illegally favoring its comparison shopping service over competitors in its search results.

If the fine sticks, it will break the previous record of 1.06 billion euros (US$1.2 billion) USA chipmaker Intel was fined in 2009.

Additionally, because evidence shows that consumers click far more often on results that are more visible, or appear higher in search results, Google is giving its own comparison shopping service a significant advantage compared to rivals, according to the Commission.

The antitrust body alleged the technology giant has breached competition rules by preventing consumers from "having as wide a choice as possible". "Thousands of European merchants use these ads to compete with larger companies like (AMZN) and eBay (EBAY)".

"When you shop online, you want to find the products you're looking for quickly and easily".

This is not the only regulatory headache Google faces in Europe. "We respectfully disagree with the conclusions announced today".

Google lawyer Kent Walker said in a blog post that "given the evidence, we respectfully disagree" with the European Union findings.

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A tech trade group to which Google belongs slammed the decision, citing the success of other comparison-shopping services such as Zalando, Asos and Trivago.

The commission investigated for seven years after complaints from rivals such as US consumer review website Yelp, TripAdvisor, NewsCorp., and lobbying group FairSearch.

The company has been given 90 days to stop abusing its market dominance or will have to pay a fine equal to 5 percent of the average daily worldwide turnover of Alphabet, the parent company.

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.

As part of parent firm Alphabet, Google could have been slapped with a charge of up to $9 billion US based on its 2016 turnover.

It makes sense for Google to push back, given that this looks like an opening European salvo against its increasingly dominant advertising business.

"This decision is a game-changer".

The biggest risk to Google is not the fine but the changes demanded to its business, said Richard Windsor, an independent financial analyst who tracks competition among the biggest USA and Asian internet and mobile companies. These concern the Android Operating System and AdSense.