Google (NASDAQ:GOOGL) have been fined a record-breaking €2.42 billion fine by the European Union, after it was found to have breached anti-competition rules with its Google Shopping service.
The ruling orders Google to end its anti-competitive practices within 90 days or face a further penalty, which could be up to 5 percent of the average daily worldwide turnover of parent company Alphabet. The US firm have said it may appeal.
Commissioner Margrethe Vestager, in charge of competition policy, said Google had come up with many “innovative products and services that have made a difference to our lives”, which was “a good thing”. However, she continued that “Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals.”
“Instead, 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.
“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” she concluded.
Google’s shopping service was originally called ‘Froogle’, then re-named ‘Google Product Search’ in 2008 and since 2013 has been called ‘Google Shopping’. It allows consumers to compare products and prices online and find deals from online retailers of all types, including online shops of manufacturers, platforms (such as Amazon and eBay), and other re-sellers.
However, the European Commission’s report found that Google has been giving prominent placement to its own comparison shopping service and demoting 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, which ensure that rival comparison shopping services show up below their own.
The European Commission concluded that Google’s practices “amount to an abuse of Google’s dominant position in general internet search by stifling competition in comparison shopping markets”.
Shares in Google’s parent company Alphabet (NASDAQ:GOOGL) are currently down 1.42 percent at 972.09 (1158GMT).