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EU hits Google with record fine over online shopping service

THE ASSOCIATED PRESS | posted Tuesday, Jun 27th, 2017

ADDS MORE INFORMATION ON ORGANIZATIONS THAT HAVE THE PROPER FORMATTING - FILE - This Oct. 20, 2015, file photo, shows a sign outside Google headquarters in Mountain View, Calif.  Google will start offering “fact check” tags next to some news stories in search results in the tech industry’s latest effort to combat false and misleading news stories, on Friday, April 7, 2017. People who search for a topic in the regular search engine or the Google News section will see a conclusion such as “mostly true” or “false” next to news stories that had been fact checked by a participating organization, such as PolitiFact and Snopes.com. (AP Photo/Marcio Jose Sanchez, File)
A sign outside Google headquarters in Mountain View, Calif. (AP Photo/Marcio Jose Sanchez)
The European Union’s competition watchdog slapped a record 2.42 billion euro ($3.6 billion Cdn.) fine on Internet giant Google on Tuesday for breaching antitrust rules with its online shopping service.

European regulators said “Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service.”

It gave the Mountain View, California, company 90 days to stop or face fines of up to five per cent of the average daily worldwide turnover of parent company Alphabet.

The European Commission, which polices EU competition rules, alleges Google elevates its shopping service even when other options might have better deals.

The Commission said Google “gave prominent placement in its search results only to its own comparison shopping service, whilst demoting rival services. It stifled competition on the merits in comparison shopping markets.”

Google maintains it’s just trying to package its search results in a way that makes it easier for consumers to find what they want.

“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,” Kent Walker, senior vice-president at Google, said in a statement.

“We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” he said.

The fine is the highest ever imposed in Europe for anti-competitive behaviour, exceeding a 1.06 billion euros ($1.58 billion Cdn.) penalty on Silicon Valley chip maker Intel in 2009.

But the penalty is likely to leave a bigger dent in Google’s pride and reputation than its finances. Alphabet has more than 82 billion euros ($122 billion Cdn.) in cash, including nearly 50 billion euros ($74 billion Cdn.) in accounts outside of Europe.

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