The European Commission has fined Google $2.77 billion for breaching EU antitrust rules. The American multinational technology corporation abused its market dominance.
Google, as a search engine, gave an illegal advantage to its products. The search engine provides search results to consumers, who pay for the service with their data. Almost 90 percent of Google’s revenues stem from adverts, such as those it shows consumers in response to a search query.
According to the European Commission, 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.
Commissioner Margrethe Vestager, in charge of competition policy, said Google has come up with many innovative products and services that have made a difference to our lives.
“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.”
She said that this 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.”
For those who are not unfamiliar with comparison-shopping, these services rely to a large extent on traffic to be competitive. More traffic leads to more clicks and generates revenue. And more traffic also attracts more retailers that want to list their products with a comparison-shopping service.
Given Google’s dominance in general internet search, its search engine is an important source of traffic for comparison shopping services.