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Google fined record €2.42 billion ($2.7 billion) over search results abuse

The European Commission has penalized Google for giving its shopping comparison tool an illegal advantage over the competition.

Published onJune 27, 2017

Google has been hit with a €2.42 billion (~$2.7 billion) fine by the European Commission, the regulator’s largest ever penalty. The search giant has been charged with giving its own shopping comparison tool an illegal advantage over the competition and has been provided 90 days to change its practices, or it will face further fines.

Google Shopping results are typically displayed on the right side of Google desktop searches (or at the top on mobile) when a consumer product is mentioned. It’s a feature that Google is able to monetize; brands pay to have their products featured in these results — as indicated by the “Sponsored” symbol that appears next to them. By giving this shopping tool priority, it’s argued that Google has unfairly stifled competing comparison services.

“What Google has done is illegal under EU antitrust rules,” said Margrethe Vestager, the European Union’s Competition Commissioner. “It has denied other companies the chance to compete on their merits and to innovate, and most importantly it has denied European consumers the benefits of competition, genuine choice and innovation.”

The BBC estimates that it could cost Google’s parent company Alphabet around $14 million per day if it fails to comply with the changes within the aforementioned three-month period.

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Responding to the ruling, Google said, “When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products. That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both. We believe the European Commission’s online shopping decision underestimates the value of those kinds of fast and easy connections.”

The search giant also stated that it “respectfully” disagreed with the Commission’s ruling and is considering an appeal.

This isn’t the only controversy Google has been at the forefront of recently: it is currently being investigated for allegedly underpaying female staff members, while reports that it exploits legal loopholes to avoid paying tax continue to circulate in the news.

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Google is by far the world’s most popular search engine and is estimated to have more than a 90 percent market share; it has a great power to influence what we see and do online. $2.7 billion might not be much to a company with a reported $172 billion in assets (Alphabet), but the stipulation that Google must change its current Shopping service — a service which Search Engine Land called “the deal of the century”, and something that is likely to be generating huge revenue for Google — will certainly cause some headaches.

That is, if Google doesn’t successfully appeal against it.

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