Google has been hit with a 2.42B Euro fine for violating EU antitrust rules. The fine is rooted in charges that Google had unfairly given an advantage to its shopping comparison service at the expense of its competitors. Now known as Google Shopping and formerly known as Froogle and Google Product Search, it would compare prices between online retailers for a product. However, Google ran afoul of EU antitrust laws by integrating it with Google search, as well as demoting search results from competitors.
Google has said that they disagree with the ruling and are exploring options for an appeal. In a blog post, Google Senior Vice President and General Counsel Kent Walker said that the goal is to “try to give you what you’re looking for.” He also maintains that there was no favoritism within search results and that Amazon and eBay have still grown while they stand accused of unfair competition. “Our ability to do that well isn’t favoring ourselves, or any particular site or seller--it’s the result of hard work and constant innovation, based on user feedback,” he said.
However, the EU Commission disputes that, noting that Google is the dominant search engine in nearly all EU member states. “[The Commission] found Google to have been dominant in general internet search markets in all EEA countries since 2008, except in the Czech Republic where the Decision has established dominance since 2011. This assessment is based on the fact that Google's search engine has held very high market shares in all EEA countries, exceeding 90% in most.” It also notes that Google benefitted through a high barrier to entry in search, noting network effects and that its large market share made it more attractive to advertisers than other platforms.
The EU notes that since Google started the practice of showing its own price comparison, “Google's comparison shopping service has increased its traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy.”, and that “traffic to rival comparison shopping services on the other hand dropped significantly. For example, the Commission found specific evidence of sudden drops of traffic to certain rival websites of 85% in the United Kingdom, up to 92% in Germany and 80% in France. “
In addition to the fine, the ruling orders that google must stop its practice within 90 days and “refrain from any measure that has the same or an equivalent object or effort.” If Google and its parent company, Alphabet, do not comply, they are liable for fines of “up to 5% of the average daily worldwide turnover”.