Google face EU fines for shopping search results manipulation

Googleplex-Patio-Aug-2014
Photo credit: Jijithecat

European Union regulators have hit Google with a record €2.4 billion fine for anti-competitive behaviour in using its search engine to unfairly push people towards its own online shopping platform.

The fine adds to the long list of American technology companies who have fallen afoul of the EU regulators.

Regulators found that Google had denied “consumers a genuine choice” and ruled that it has 90 days to change its behaviour, or face additional fines of up to 5 per cent of average daily worldwide sales of parent company Alphabet Inc for each day that the infringement continued.

“What Google has done is illegal under EU antitrust rules. It denied other companies the change to compete on the merits and to innovate. And more importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” said Margrethe Vestager, the EU’s competition commissioner.

EU regulators complained that Google gives priority to its own shopping platform when users search for items, while also relegating its larger competitors to subsequent results pages. Smaller competitors could potentially be found as far back as page three or four.

This practice gives Google a huge advantage, as 90 per cent of clicks are from the first page of results, and merchants are required to pay Google to promote their items.

Google defended the practice, saying consumers like the convenience of concise results, with general counsel Kent Walker saying that the decision “underestimates the value of those kinds of fast and easy connections”.

“Our data shows that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches.”

Evidence presented to the commission said that competitors saw their shopping traffic drop by up to 90 per cent, while Google subsequently profited by pushing users towards its own shopping platform.

Complaints against the way Google handled shopping searched date back to 2009, when small UK-based price comparison website Foundem submit a complaint to the European Commission after noticing their website traffic had dramatically decreased after Google began promoting its own platform above others.

Although the case struggled to gain traction, with minor changes made by Google, including labelling its own promoted results as such, appearing to satisfy the then-Commissioner for Competition Joaquin Almunia, it was not until 2013 when Vestager took over from Almunia and Google was formally accused of breaching antitrust rules.

Foundem co-founder Shivaun Raff welcomed the decision, saying, “although the record-breaking fine us likely to dominate the headlines, the prohibition of Google’s immensely harmful search manupulation practices is far more important.”

Google are considering an appeal, though with Alphabet Inc reportedly holding just over $90 billion in cash earlier this year, the fine is unlikely to have a huge impact.

This case is not the only time Google has faced criticism from EU regulators, with further investigations dating back to 2010 involving their advertising platform AdSense and restrictions placed on manufacturers and mobile networks using its Android operating system.

Google have a 90 per cent share of searches within Europe, which is higher than in the USA.

The fine has reignited accusations of anti-American bias from the EU, with Apple, Facebook, and Intel, among others, all having fallen afoul of antitrust regulators in recent years.

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