The European Commission has fined Google a whopping $2.7 billion for antitrust violations pertaining to Google s Shopping search comparison service. According to the commission, the search engine has been abusing its dominance by giving illegal advantage to own comparison shopping service . The decision follows a seven-year investigation into Google s search algorithms. Also, Google s fine is the largest antitrust judgment handed out by the European Commission, topping a $1.1 billion penalty given to Intel in 2009, which was followed by 2004 Microsoft decision where the company was fined $794 million. Also Read - Happy Father's Day 2021: Google Doodle wishes dads with cute pop-up greeting cardAlso Read - Google might be working on a 'Find My' network clone for Android users
The company must now end the conduct within 90 days or face penalty payments of up to 5 percent of the average daily worldwide turnover of Alphabet, Google’s parent company. If we were to draw some context on the size of the fine, Alphabet s annual revenue for the year 2016 was almost $90 billion. Also Read - PUBG New State receives over 17 million pre-registrations as closed alpha testing ends
Essentially, in its investigation, the commission found that Google was systematically giving prominent placement to its own comparison shopping service. Basically, hen a consumer enters a query into the Google search engine, Google s comparison shopping service always shows up on top or near the top of the search results. Apart from that, Google was also demoting its rival comparison shopping services in its search results, so that the rival comparison shopping services appear in Google s search results on the basis of Google s generic search algorithms.
The evidence shows that consumers click far more often on results that are more visible, i.e. the results appearing higher up in Google’s search results. Even on a desktop, the ten highest-ranking generic search results on page 1 together generally receive approximately 95 percent of all clicks on generic search results (with the top result receiving about 35 percent of all the clicks). The first result on page 2 of Google’s generic search results receives only about 1 percent of all clicks. This cannot just be explained by the fact that the first result is more relevant, because evidence also shows that moving the first result to the third rank leads to a reduction in the number of clicks by about 50 percent. The effects on mobile devices are even more pronounced given the much smaller screen size, European Commission press release read.
Which means, for its rivals, Google included a number of criteria in these algorithms, as a result of which rival comparison shopping services were automatically demoted. EU s corroboration reflect that even the most highly ranked rival service appeared on average only on page four of Google s search results, and others appear even further down. However, Google s own comparison shopping service were not subject to Google s generic search algorithms, including such demotions. ALSO READ: European Union abolishes mobile roaming charges
“Google has come up with many innovative products and services that have made a difference to our lives. That’s a good thing. But Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product 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 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,” Commissioner Margrethe Vestager, in charge of competition policy, said.
BGR India has reached out to Google to know more about EU s ruling.
However, TechCrunch quotes Shivaun Raff, CEO and co-founder of Foundem, the lead complainant in the case responding to the statement saying, We welcome today s announcement that the European Commission has adopted a Prohibition Decision in the Google Search case. Although the record-breaking 2.42 billion fine is likely to dominate the headlines, the prohibition of Google s immensely harmful search manipulation practices is far more important. There can t have been many Competition cases where the stakes for consumers, businesses, and innovation were any higher. ALSO READ: EU opens anti-trust probe into Amazon e-book business
For well over a decade, Google s search engine has played a decisive role in determining what most of us read, use and purchase online. Left unchecked, there are few limits to this gatekeeper power. Google can deploy its insidious search manipulation practices to commandeer the lion s share of traffic and revenues in virtually any online sector of its choosing, quietly crushing competition, innovation, and consumer choice in the process, Raff added.
In 2004, Google entered the separate market of comparison shopping in Europe, with a product that was initially called Froogle , re-named Google Product Search in 2008 and since 2013 has been called Google Shopping . It allows consumers to compare products and prices online and find deals from online retailers of all types, including online shops of manufacturers, platforms (such as Amazon and eBay), and other re-sellers.