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

The action came after a seven-year long investigation prompted by scores of complaints from rivals

PUBLISHED : Tuesday, 27 June, 2017, 6:00pm
UPDATED : Tuesday, 27 June, 2017, 10:53pm

EU antitrust regulators hit Alphabet unit Google with a record 2.42 billion (US$2.7 billion) fine on Tuesday, indicating they will probably take a tough line with the company in two other ongoing cases.

The European Commission said the world’s most popular internet search engine has 90 days to stop favouring its own shopping service or face a further penalty of up to 5 per cent of Alphabet’s average daily global turnover.

The Commission found that Google had systematically given prominent placement in searches to its own comparison shopping service and demoted those of rivals in search results.

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[Google] denied other companies the chance to compete on the merits and to innovate
Margrethe Vestager

Hard-charging European Commission competition chief Margrethe Vestager said Google had “abused its market dominance” as the world’s most popular search engine to give illegal advantage to its Google Shopping service.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate,” Denmark’s Vestager told a news conference.

“And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

Google now has 90 days to “end this conduct” or face further penalty payments, Vestager said.

Google said that it “respectfully” disagreed with the EU decision and was considering an appeal.

“We respectfully disagree with the conclusions announced today. We will review the (European) Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” Kent Walker, the company’s senior vice-president and general counsel, said in a statement.

The action came after a seven-year long investigation prompted by scores of complaints from rivals such as US consumer review website Yelp, TripAdvisor, UK price comparison site Foundem, News Corp and lobbying group FairSearch.

This is the biggest fine for a single company in an EU antitrust case, exceeding a 1.06 billion sanction handed down to US chip maker Intel in 2009.

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It is also the biggest regulatory setback for Google, which settled with US enforcers in 2013 with a requirement to stop “scraping” reviews and other data from rival websites for its own products.

The EU competition enforcer has also charged Google with using its Android mobile operating system to crush rivals, a case that could potentially be the most damaging for the company, with the system used in most smartphones.

The company has also been accused of blocking rivals in online search advertising, with the Commission warning of deterrent fines if Google is found guilty of breaching EU rules.

Additional reporting by Agence France-Presse