The Strategist

Google gets record € 2.42 billion fine from the EC

06/28/2017 - 10:19

The American corporation provided its own service to compare products Google Shopping with illegal benefits.

Emmanuel Digiaro via flickr
Emmanuel Digiaro via flickr
The European Commission fined American Google for € 2.42 billion for abuse of the dominant position in the search market. In particular, the company was fined for granting its own service Google Shopping with illegal benefits. This is stated in a message published on Tuesday, June 27, on the regulator's website.

"The European Commission fined Google for € 2.42 billion for violating the rules of the EU antitrust laws," the press release said.

Within 90 days, the company must stop its illegal actions, otherwise Alphabet (Google’s parent company) will receive additional penalties in the amount of 5% of the average daily turnover of the holding. Within 60 days, Google is obliged to notify the regulator of the measures that it plans to take to solve the problem.

The European Commission found out that the search for individual goods and services on the Internet was conducted in such a way that commercial partners and Google customers were placed in the first positions in the search results of Google Shopping service. As a result of such illegal actions, traffic to Google's shopping comparison services has grown significantly, while traffic of the competitors have fallen dramatically. According to the EC, from the moment of entering the market in 2008, Google's service traffic has grown 45 times in the UK, 35 times in Germany, 19 times in France, 29 times in the Netherlands, 17 times in Spain and 14 - in Italy. Simultaneously, traffic to competing trade services fell by 85% in the UK, 92% in Germany and 80% in France.

European Commissioner for Competition Margrethe Vestager noted that instead of making its product more competitive, Google simply abused its dominance in the search engine market, promoting its own service of comparing purchases in search results and lowering the rating of competitors. "What Google did is illegal, according to EU antitrust rules. The company has deprived its competitors of the opportunity to compete on the merits and introduce innovations. And most importantly, it deprived European consumers of the genuine opportunity to choose services", the press release said.

The size of the fine is a record for antitrust cases. In 2009, the EC ordered Intel to pay € 1.06 billion.

In preliminary bidding in New York, Alphabet shares fell 1.3% on Tuesday.

Google introduced the product comparison service back in 2004 under the name Froogle. In 2008, it was renamed Google Product Search, and in 2013 - Google Shopping. The service helps users to compare offers from different online shopping areas.


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