Date
22 July 2017
European Competition Commissioner Margrethe Vestager speaks to reporters in Brussels on Tuesday while announcing a record fine on Google. Photo: Reuters
European Competition Commissioner Margrethe Vestager speaks to reporters in Brussels on Tuesday while announcing a record fine on Google. Photo: Reuters

Google fined US$2.7 bln by EU for skewing search results

The European Union’s antitrust regulator on Tuesday announced a record 2.42 billion euro (US$2.71 billion) fine on Google, accusing the Internet giant of skewing search results in its favor to thwart smaller shopping search services.

Announcing the decision, EU antitrust chief Margrethe Vestager stressed that dominant companies have special “responsibilities” not to hinder competition, the Wall Street Journal reports.

Companies should not “abuse their power in one market to give themselves an advantage in another,” she said.

The EU detailed what it said were years of abuses by Google, including demoting the results of rivals and artificially promoting its own shopping service above all other results.

Those changes led to what the regulators said was a 45-fold traffic increase in the UK and a 35-fold increase in Germany, with drops of traffic to rivals of 85 percent in the UK and 92 percent in Germany.

The EU penalty, which came after more than seven years of investigations, threatens far-reaching ramifications not just for Google, but for the design of products and services from other increasingly dominant tech giants, the Journal noted.

Google General Counsel Kent Walker said “we respectfully disagree with the conclusions announced today.”

The company will review the decision and consider an appeal.

Google believes its service benefits users and helps European merchants compete against bigger e-commerce giants Amazon and eBay, Walker said.

He added that European regulators also erred in not considering Amazon and eBay as online-shopping competitors to Google.

The EU’s fine is more than double what had been the bloc’s previous record penalty for a company it found had abused its market position—a 1.06 billion euro fine on Intel in 2009.

As part of its decision, the EU ordered Google to treat rival comparison-shopping services equally in its search results, but it left it up to Google to figure out how.

Google has 90 days to comply with the order to change its services, or faces penalties of up to 5 percent of average daily global revenue for each day it doesn’t comply, according to the report.

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RC

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