European Commission Fines Google to the Tune of $2.7Billion for Exploiting Search Dominance
Google has been fined a staggering $2.7Billion after the European Commission after it found the former to favoring its own shopping comparison services in search results. The $2.7Billion makes it to the record books and is more than the $1Billion estimated earlier. The commission has further instructed Google to resolve the issue within the next 90 Days and failing to do so will attract a further fine of 5% of the Alphabets daily global turnover. The investigations have been concluded after 7-years.
The European Commission has backed their claim with evidence that shows Google promoting its own Google Shopping services as a result of which the highest-ranked competitor usually ended up appearing on page 4. This according to the commission is a direct abuse of Google’s dominant position in the Search.
Google has abused this market dominance by giving its own comparison shopping service an illegal advantage. It gave prominent placement in its search results only to its own comparison shopping service, whilst demoting rival services. It stifled competition on the merits in comparison shopping markets.-European Comission
Well the EC has further mentioned that Google will be liable for civil claims for damages of competitors who may have lost revenue due to demotion of their services. Google has however considered appealing and is blaming the reduction of traffic to the comparison sites on the likes of Amazon and eBay, both of which according to Google has been in the dominant position.
Google has explained its stand in a blog post titled “The European Commission decision on online shopping: the other side of the story.” They have elaborated on how users would like to directly land on merchant sites instead of being redirected to a comparison site. Google also stated how the smaller merchants are making use of the ads in order to compete against the likes of Amazon and eBay. It is also worth noting that Google has been earlier accused of tax avoidance, Employee Antitrust Litigation and also censorship of search results.
We believe the European Commission’s online shopping decision underestimates the value of those kinds of fast and easy connections. While some comparison shopping sites naturally want Google to show them more prominently, our data show that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches.