Google Shopping decision sets precedent which could decide future of Google Flights


EU Commissioner Magrethe Vestager said in a statement "What Google has done is illegal under EU antitrust rules".

The penalty payment for failure to comply would amount to around $12 million a day based on Alphabet's 2016 turnover of $90.3 billion. Macquarie Research thinks that while the practice probably is unfair, the fine severely limits Google's ability to refine and improve its core product, which could mean big headwinds for Google in Europe.

News Corp says the multi-billion dollar fine slapped on Google by the European Commission should be just the first step in combating the company's abuse of its online search dominance.

"What Google has done is illegal under EU antitrust rules", said Margrethe Vestager, the European Union's Competition Commissioner.

The commission said that since 2008, Google has systematically given prominent placement to its own comparison shopping service, while demoting rival comparison shopping services in its search results.

The company has also been ordered to cease its behavior with regard to its comparison shopping service within 90 days or face additional fines of up to five percent of parent company Alphabet's worldwide daily revenues.

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'Google has come up with many innovative products and services that have made a difference to our lives. Following the demotions applied by Google, traffic to rival comparison shopping services on the other hand dropped significantly.

What the EC is arguing then, is that because Google favors itself in its own products, it is anticompetitive simply because of its search engine dominance.

When you shop online, you want to find the products you're looking for quickly and easily. The fine was set at a level that the Commission considers accurately reflects the seriousness and duration of the abuse The Commissioner further commented that: 'What Google has done is illegal under European Union antitrust rules.

"When the Commission asks why some comparison websites have not done as well as others, we think it should consider the many sites that have grown in this period - including platforms like Amazon and eBay", Kent Walker, Google's general counsel, said in a blog post Tuesday.

As just a handful of largely American companies have become global tech monopolies, regulators in the United States have done little to deter anticompetitive practices. "And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation".

Should Google make significant changes to the way it runs this service, Kessler believes that a large chunk of those revenues would likely disappear.