Google hit with £2.1bn fine over anti-competitive shopping service

Posted June 29, 2017

The commission has given Google 90 days to end its anti-competitive behaviour, which the regulator claims breaches European Union antitrust rules, or else face further fines worth five per cent of parent company Alphabet's daily worldwide earnings for every day after the three-month deadline.

Currently, if a user searchers for electrical goods, clothing, or other items on Google, they will see sponsored results from Google price comparison engine Google Shopping, often displayed with images unavailable to other advertisers.

Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google's search results on the basis of Google's generic search algorithms.

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 European Union rules. Instead, she argued, it "denied other companies the chance to compete".

The commission congratulated Google's many innovative technologies and services, but said the company had abused its position and the trust of European consumers.

"They reach merchant websites in many different ways: via general search engines, specialist search services, merchant platforms, social media sites, and online ads served by various companies", Kent Walker, Google's general counsel, has written, as quoted by CNBC.

Walker said the search results displayed by the company are "the result of hard work and constant innovation, based on user feedback".

This action comes after 7 years of long investigation after scores of complaints were given to the EU Commission by Google's rivals such as Yelp, Foundem, NewsCorp, FairSearch and TripAdvisor. In a statement, ETTSA - the European trade body for online travel welcomed the decision and called on the Commission to address Google's dominance in travel.

Regulators further warned Google to change its behaviour within 90 days or face additional penalties, reports the CNN.

On the other hand, Google has denied these accusations and said that they always intended that the search results are easier for the customer. However, there is more to Google's strategy considering its shopping service than meets the eye.

Google issued a statement saying it respectfully disagrees with the decision and it is considering an appeal.

In 2004 Google entered the separate market of comparison shopping in Europe, with a product that was initially called "Froogle", re-named "Google Product Search" in 2008 and since 2013 has been called "Google Shopping". "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".