Google has been fined a record €2.42bn (£2.1bn) by the European Commission for abusing is market dominance online to promote its own shopping comparison service.
Currently, if a user searchers for electrical goods, clothing, or other items on Google, they will see sponsored results from Google price comparison engine Google Shopping, often displayed with images unavailable to other advertisers. Due to the US tech giant’s dominance in online search, the commission found that the way Google favoured sponsored results from it own Shopping service provided the firm with an unfair advantage over alternative price comparison and shopping websites.
Google has 90-days to comply with the ruling, but the commission has left it up to the California-based firm to determine what alterations it will need to make to its Shopping service to remedy the situation.
If it does not comply within three months, Google’s parent company Alphabet could be ordered to make payments of 5% of its average daily worldwide earnings, which is currently about $14m (£11m) per day.
Margrethe Vestager, the European Union’s Competition Commissioner, said:
“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.
“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 a post on Google’s official blog, the company said they “respectfully disagree” with the commission’s conclusions and will consider an appeal. They said:
“We think our current shopping results are useful and are a much-improved version of the text-only ads we showed a decade ago. Showing ads that include pictures, ratings, and prices benefits us, our advertisers, and most of all, our users. And we show them only when your feedback tells us they are relevant. Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay.
“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. With its comparison tools, reviews, millions of retailers, and vast range of products from sneakers to groceries, Amazon is a formidable competitor and has become the first port of call for product searches. And as Amazon has grown, it’s natural that some comparison services have proven less popular than others. We compete with Amazon and other sites for shopping-related searches by showing ever more useful product information.”