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Why it’s important to rein in Google’s power

The European Union’s unprecedented £2.42 billion antitrust fine against the search engine giant should be seen as a victory for online shoppers

PUBLISHED : Wednesday, 05 July, 2017, 3:55am
UPDATED : Wednesday, 05 July, 2017, 3:55am

Every industrial era seems to get its own landmark antitrust case against a powerful monopolist. The European Union’s unprecedented £2.42 billion (HK$21 billion) fine against Google will have major implications for business practices in the technology sector. It bears comparison with Washington’s successful antitrust case against Standard Oil, a pre-eminent player in a defining industry of the age, a century ago. Google, which enjoys a near monopoly in online searches, has been found to have abused its dominance to give illegal advantages to its own shopping service and advertisers who pay for it.

While the search engine giant is set to appeal against the ruling, it still has to pay the fine and propose remedies.

EU hits Google with record US$2.7 billion fine for ‘denying other companies chance to compete’

To most online shoppers, Google’s behaviour means little. But consider this: the internet should offer unique and convenient platforms for shoppers to compare prices for services and products.

But, after a seven-year investigation, what the European Commissioner for Competition has found is that Google automatically prioritises its own advertising clients for viewing, while relegating rival and unpaid services to the bottom. On average, commission investigators found rivals on page 4 of web searches. Considering Google makes most of its money from advertising, this is no small matter.

Some critics of the commission have argued that the case is not as relevant as it once was as online shopping has more than tripled to US$257 billion since the commission first launched its investigation, thereby diluting Google’s dominance. Indeed, Google has argued that other online market platforms such as Amazon and eBay have grown to be powerful players themselves. The fact remains, though, that Google still controls much of the online traffic for shopping.

Besides paying the fine, Google must now provide remedies acceptable to the commissioner. There are many technical routes it can pursue. But the end result must mean greater neutrality in online shopping results for users. This can only benefit shoppers, but only in those countries over which the commissioner has jurisdiction.

Then again, Google may yet win on appeal.