EU fines Google €2.4bn for abusing its dominance in search

EU has fined Google €2.42bn for abusing its dominance in on line search and can be hit with further non-compliance fines. The company has 90 days to make changes.

googleThe European Commission ended its seven-year competition investigation concluding that Google had abused its near-monopoly in online search to “give illegal advantage” to its own shopping service. Brussels has hit Google with a €2.42bn antitrust fine.

The company has 90 days to make changes and must “refrain from any measure that has the same or an equivalent object or effect”, the commission said.

Although the ruling orders Google to cease the anti-competitive practices, the precise changes required are expected to take months or even years to negotiate. The company can be hit with further non-compliance fines.

The commission found Google “systematically” gave prominent placement to its own in-house service, and demoted rival comparison shopping services in search results, so “even the most highly ranked rival service appears on average only on page four of Google’s search results”.

The ruling defines a new type of anti-competitive behaviour, stipulating that companies with a dominant market share cannot favour their own adjacent products or services. It may mean that Google no longer has a free hand in giving preference to its own services in search results.

The €2.4bn penalty was calculated as up to 30 per cent of Google Shopping revenues multiplied by the years of the abuse, capped at a maximum of €9bn. The cap represents 10 per cent of Alphabet’s total revenue last year.

Fines for delays in making changes ordered by Brussels can be up to 5 per cent of daily revenues — which would be roughly $12m daily. The company will need to change its services throughout the European Economic Area.