Google has been fined $2.7 billion by European regulators for using its dominance in the search engine market to favor its comparison shopping service over competitors like Amazon or eBay.
The European Commission, the regulatory arm of the European Union, found that Google broke antitrust rules by giving more prominent placement to its comparison shopping service in search results, while demoting other comparison services. The commission claims Google’s comparison shopping service has seen massive traffic increases in Europe in recent years, while rivals have seen their traffic drop.
“Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing,” said EU Commissioner Margrethe Vestager, who is in charge of competition policy. “But 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.”
In addition to the large fine, the commission ordered Google to correct its alleged anti-competitive practices, and give equal treatment to other comparison shopping services. Google has 90 days to rectify the issue, or else it will face fines equivalent to 5 percent average daily worldwide turnover of Alphabet, Google’s parent company.
Google is disputing the findings of the seven-year investigation, which was prompted by complaints from companies like Yelp, TripAdvisor and NewsCorp. In a blog post, Google Senior Vice President and General Counsel Kent Walker pointed, in part, to the rise of Amazon in defense of Google’s search practices.
When the Commission asks why some comparison websites have not done as well as others, we think it should consider the many sites that have grown in this period — including platforms like Amazon and eBay. With its comparison tools, reviews, millions of retailers, and vast range of products from sneakers to groceries, Amazon is a formidable competitor and has become the first port of call for product searches. And as Amazon has grown, it’s natural that some comparison services have proven less popular than others. We compete with Amazon and other sites for shopping-related searches by showing ever more useful product information.
Amazon passed Google as the top destination for U.S. online shoppers in 2012, according to a Forrester Research report, and that lead has continued to grow. In 2014, Alphabet Chairman Eric Schmidt said that Amazon was his company’s biggest search competitor.
Walker wrote, “Given the evidence, we respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”
