Alphabet Inc. — the parent company of multifaceted tech giant Google — has been hit with a massive €2.4 billion ($2.7 billion) fine by the European Union’s antitrust regulator for favoring its own shopping service over competitors in search results.
The penalty was more than double the previous record for an EU fine, when Intel was slapped with a €1.06 billion fine in 2009.
“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,” said Margrethe Vestager, the EU’s antitrust chief. “What Google has done is illegal under EU antitrust rules.”
The EU looked into years of data before levying the fine, focusing on the company’s promotion of its shopping options above its competitors for user searches. Google — which has more than 90 percent of the search engine marketshare in Europe — was said to be abusing its power and dampening competition by pushing its shopping results ahead of its rivals.
Google now has 90 days to change how it presents search results or it’ll have to pay daily “penalty payments” of up to 5 percent of its daily worldwide income.
“When you use Google to search for products, we try to give you what you’re looking for,” said Google Senior Vice President Kent Walker in a statement following the ruling. “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.”
While the fine will put a strain on the already contentious relationship between Silicon Valley and the EU, other companies are applauding the decision.
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“We applaud the European Commission’s leadership in confronting the discriminatory behavior of Google in the comparison shopping industry,” said a News Corp. in a statement on the ruling. “Other regulators and companies have been intimidated by Google’s overwhelming might, but the Commission has taken a strong stand and we hope that this is the first step in remedying Google’s shameless abuse of its dominance in search.”
After several complaints from competing businesses, the EU opened its investigation into Google’s practices in 2015. The anti-trust violation now opens Google up to battles on two fronts: companies affected by its search results can now bring them to court, and Vestager hinted the EU may check if Google used its power to illegally sway consumers in other ways.
“We have been looking into this, and today’s decision is a precedent, a precedent that can be used as a framework to analyse the legality of such conduct,” said Vestiger. “Today’s decision shows in Europe companies must compete on their merits, regardless of whether they operate online or on the high streets, regardless of whether they are European or not.”
The financial pain may not be over for Google, either — it’s facing two additional investigations from the EU into its AdSense and Android businesses.
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