EU fines Google €2.42 billion, orders changes in search results

Google must stop promoting its comparison shopping service ahead of rival services

IDG
IDG

Google abused its dominant position in the search engine market to illegally promote its comparison shopping service, the European Union's top antitrust authority ruled Tuesday, slapping the company with a €2.42 billion (US$2.72 billion) fine.

The consequence could be still greater differences in the ways Google presents search results to users in the U.S. and to those in the EU.

The European Commission gave the the company 90 days to change its ways or face additional fines of up to 5 percent of average daily worldwide sales of parent company Alphabet for each day that the infringement continued.

The Commission's ruling targets the way Google uses its search service to promote another service, "Google Shopping", previously known as Google Product Search and Froogle.

Google gives its own service a prominent place in its general search results, above that of rival comparison shopping services, the Commission said, noting that even the most highly ranked competing service appears on average only on page four of Google's search results.

"As a result, competitors are much less likely to be clicked on," said EU Competition Commissioner Margrethe Vestager, during a news conference Tuesday.

Google responded: "People usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches."

Competitors saw their traffic drop by as much as 90 percent as a result of Google's behavior, Vestager said, while Google gained revenue by driving visitors to its own service.

"It denied other companies the chance to compete on the merits," she said.

Shivaun Raff, CEO and cofounder of Foundem, the lead complainant in the case, welcomed the Commission's decision to prohibit Google's actions.

"Although the record-breaking €2.42 billion fine is likely to dominate the headlines, the prohibition of Google’s immensely harmful search manipulation practices is far more important," she said.

Vestager said it was up to Google to decide exactly how to comply with the ruling.

"Google cannot simply stop what it is doing now and replace it with similar practices that have the same anticompetitive effect," she said, warning the company that Commission would monitor its behavior closely for a number of years.

The Commission analyzed 5.2 terabytes of search results, the equivalent of 1.7 billion search queries, in coming to its conclusion, she said.

It also conducted experiments to see whether users' preferences for top search results was linked to their relevance, or just their position in the list, and found that the same result, when moved from first to third place, received significantly fewer clicks.

Vestager also warned that the promotion of Google Shopping may not be the only way in which Google is abusing search to promote its other specialized search services, including images and local travel.

"We have proven that Google is a dominant company in general search. That will be the starting point for our analysis of these other services," she said.

The search case is not the only one the Commission has open against Google. It is also investigating its AdSense advertising platform, and its promotion of apps and services related to its Android operating system.

"Our preliminary conclusion in relation to both practices is that they breach EU antitrust rules," Vestager said.

She invited Google to compete on its merits, and to make the most of the EU market of 500 million consumers.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

Thank you for sharing your knowledge. Definitely bookmarked for future reading! Check this website https://a2designlab.com/ with lots of ...

Pierce Fabreverg

Study: Gen Z are huge opportunity for brands

Read more

Thanks for sharing. You might want to check this website https://lagimcardgame.com/. An up and coming strategic card game wherein the cha...

Pierce Fabreverg

Board games distributor partners with Deliveroo in business strategy pivot

Read more

Such an important campaign, dyslexia certainly need more awareness. Amazing to see the work Code Read is doing. On the same note we are a...

Hugo

New campaign aims to build understanding around scope and impact of dyslexia

Read more

Great Job on this article! It demonstrates how much creativity, strategy and effort actually goes to produce such unique logo and brandin...

Pierce Fabreverg

Does your brand need a personality review? - Brand vision - CMO Australia

Read more

Here’s an article on solving the most complex customer queries without a delay. Hope it helpswww.engati.com/blog/address...

soham

How to manage social media during Covid-19

Read more

Blog Posts

A few behavioural economics lesson to get your brand on top of the travel list

Understanding the core principles of Behavioural Economics will give players in the travel industry a major competitive advantage when restrictions lift and travellers begin to book again. And there are a few insights in here for the rest of the marketing community, too.

Dan Monheit

Co-founder, Hardhat

Predicting the Future: Marketing science or marketing myth?

Unicorns, the Sunken City of Atlantis, Zeus: They are very famous. So famous in fact, that we often think twice about whether they are real or not. Sometimes if we talk about something widely enough, and for long enough, even the strangest fiction can seem like fact. But ultimately it is still fiction - stories we make up and tell ourselves over and over until we believe.

Kathy Benson

Chief client officer, Ipsos

Winning means losing in the game of customer retention

At a time of uncertainty and economic hardship, customer retention takes on much greater importance. CX Lavender’s Linda O’Grady examines the big grey area between ‘all’ and ‘best’ customers when deciding who is worth fighting for and how.

Linda O'Grady

Data Strategy Partner & Business Partner, CX Lavender

Sign in