Saturday

23rd Sep 2017

EU fines Google €2.4 bn over online shopping

  • Vestager: "Visibility and traffic are two sides of the same coin" (Photo: ec.europa.eu)

The European Commission fined Google €2.4 billion on Tuesday (27 June) for misusing its near-monopoly position over online search to steer users to its shopping comparison service. 

"Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service," EU antitrust boss Margrethe Vestager told journalists.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • EU fine would be biggest ever (Photo: Michael McGimpsey)

"Google Shopping", as the service is known, was not attracting customers merely by offering a better product than its rivals, she went on, but by using its search engine to promote the service and demote those of competitors.

Starting 2008, whenever someone googled a product, the company displayed ads for its own shopping service at the top or near top of the page, while the most highly ranked rival sites appeared on average only on page four of Google's search results, while others appeared even further down, according to Vestager's probe.

"Visibility and traffic are two sides of the same coin, and I am using the word coin literally," the commissioner said.

"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," the Danish politician said.

The €2.4 billion fine is the biggest ever for an antitrust case, and more than twice the sum handed down to US chipmaker Intel in 2008, which was the previous record.

It it calculated to have a deterrent effect and was based on Google Shopping revenues in 13 countries where the service is available and the EU has jurisdiction, as well as the duration and gravity of the infringement.

Google has 90 days to change its service so that all shopping sites are treated equally, or face a penalty of up to 5 percent of its average global turnover.

Google will not be given any guidelines from Vestager for how to do that, who said it is up to the company to find a way of implementing the order.

Google says the commission cannot prove the anti-trust changers and will likely appeal the decision, which could take years.

It says the commission takes issue with the format of their ads, which are more attractive than those of its competitors.

Google's legal chief Kent Walker defended placing the ads higher on the site, saying: "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."

The company also says the EU executive is working with a dated picture of the competition in shopping services, and that competition has thrived despite Brussels' claims of misuse of its market position.

"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", the firm said.

Google is also facing charges of abuse of its dominant position in two other EU cases.

Those involve imposing allegedly unjustified conditions on manufacturers and mobile network operators using Android, its phone service, and banning competitors from websites using its search bars and ads by way of protecting its dominant position in online advertising.

Focus

EU targets Google in copyright reform

Publishers welcomed EU proposals for a new right that could see them take a bite out of Google's income, but some say the law could end up hurting Google's smaller rivals.

Agenda

EU court to rule on migrant quotas This Week

A court ruling on migrant relocations will spotlight on one of the EU bloc's most divisive issues this week. The North Korea crisis will also pose a test for EU foreign policy.

Focus

EU to beef up cybersecurity agency

The Commission's president proposed to set up a European Cybersecurity Agency. The EU already has an agency for Network and Information Security.

Feature

Nine lines that changed history - at least on the internet

Google has removed 800,000 search results across the EU following complaints from citizens, without the public knowing what has been removed, why it was removed or who complained. We revisit the case that rewrote history online.

News in Brief

  1. Dutch state appeals ban on taking air-polluting measures
  2. May proposes 2-year transition period after Brexit
  3. May to call on EU's 'sense of responsibility'
  4. Catalonia has 'contingency plans' for independence vote
  5. Last German polls confirm Merkel's lead
  6. EU to step up sanctions on North Korea
  7. Tusk calls 'euro summit' in December
  8. Report: May to seek two-year EU transition

Stakeholders' Highlights

  1. EU2017EEEU Finance Ministers Agreed to Develop New Digital Taxation Rules
  2. Mission of China to the EUGermany Stands Ready to Deepen Cooperation With China
  3. World VisionFirst Ever Young People Consultation to Discuss the Much Needed Peace in Europe
  4. European Jewish CongressGermany First Country to Adopt Working Definition of Antisemitism
  5. EU2017EEFour Tax Initiatives to Modernise the EU's Tax System
  6. Dialogue PlatformResponsibility in Practice: Gulen & Islamic Thought
  7. Counter BalanceHuman Rights Concerns Over EIB Loan to the Trans Anatolian Pipeline Project
  8. Mission of China to the EUChina Leads the Global Clean Energy Transition
  9. CES - Silicones EuropeFrom Baking Moulds to Oven Mitts, Silicones Are a Key Ingredient in Kitchens
  10. Martens CentreFor a New Europeanism: How to Put the Motto "Unity in Diversity" Into Practice
  11. Access MBAGet Ahead With an MBA Degree. Top MBA Event in Brussels
  12. Idealist QuarterlyIdealist Quarterly Event: Building Fearless Democracies With Gerald Hensel