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Google handed a smack down by the European Union

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Google handed a smack down by the European Union

Google handed a smack down by the European Union

Software giant Google has been fined a record-breaking 2.14 billion dollar fine by the Europen Union for abuse of the search engine market that Google dominates. Google has been accused of forcing its own price comparison services that illegally push down the results of its competitors, leaving consumers with less choice and abusing its position.

Google has been given 90 days to cease these practices and detail to the EU how it intends to correct its artificially generated search results or else face a fine of more than 10 million dollars a day. After coming to this ruling, the EU is deepening its investigation of the Silicon Valley giant to see if Google is abusing its power elsewhere.

The decision was reached after an extensive seven year investigation into the way search results are generated by Google. The commission has also said that the company may want to rethink the way they conduct business altogether. Margrethe Vestager, who is leading the commission has denied any bias towards American companies operating in the EU.

“Google has come up with many innovative products and services that have made a difference to our lives,” Vestager said. “That’s a good thing. But Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its products better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of its competitors.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chances 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.”

After the announcement, Alphabet shares fell 1.5% in pre-market trading in New York. Alphabet is the parent company of Google.

Google is rejecting the claims of breaching antitrust regulations and says it plans to appeal, meaning that a long legal battle between the EU and Google is on the horizon. A spokesperson for the software company 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 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 large fine set out by the commission was designed to take into account the long duration of the infringement as well as the gravity, they based the amount on Google’s revenue from the 13 countries where the activity occurred.

With several investigations ongoing, and faced with a large daily fine the number of accusation being made towards Google are staggering. The commission’s greatest concern is that Google has prevented fair play in the market for its competitors by hiding their ads and pushing their own ads to the front of searches and web pages.

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