The European Commission has fined Google €2.42 billion for breaching EU antitrust law by abusing its market position as a search engine to help Google’s comparison-shopping service. The American tech giant now has 90 days to end this conduct or face the penalty of up to 5% of the average daily global turnaround of Alphabet, its parent company.
Commissioner in charge of competition policy, Margrethe Vestager, commented that Google has indeed enriched our lives with many services that make a huge difference in our lives and said this was a good. However, she also added, Google’s strategy for its comparison service was not just about attracting customers by making its product better than those of comparison shopping services.
“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 competitors. 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,” she said.
Goggle entered the European market of comparison shopping in 2004 with a product that was initially called “Froogle”, which was rebranded “Google Product Search” in 2008, and since 2013 has been known as “Google Shopping”. The service allows consumers to compare prices online and find deals from online sellers including platforms such as Amazon and eBay. However, comparison-shopping services derive their profit from traffic. More traffic leads to more clicks, which in turn leads to more revenue. More traffic also attracts more sellers that want to list their products with that particular comparison-shopping service.