Google Faces $2.7 Billion Fine From EU Over Skewed Search Results

Accused of giving preferential treatment to its own shopping site

Margrethe Vestager, the current European Commissioner for Competition, announced the fines against Google today.
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According to the European Commission, Google has been steering users in the EU toward its own shopping platform rather than giving them an equal choice between its competitors.

“What Google has done is illegal under EU antitrust rules,” said Margrethe Vestager, a top antitrust official with EU regulators. “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.”

This comes at the end of a seven-year probe, according to Bloomberg, inspired by complaints from smaller shopping websites and larger companies about Google’s algorithms and loyalties.

Kent Walker, Google svp and general counsel, maintained in a blog post that the company hasn’t done anything wrong.

“While some comparison shopping sites naturally want Google to show them more prominently, our data shows that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches,” wrote Walker.

“Showing ads that include pictures, ratings, and prices benefits us, our advertisers, and most of all, our users,” he said. “And we show them only when your feedback tells us they are relevant. Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay.”

The fine represents just over 2.5 percent of Google’s revenue from last year, but fines could increase up to 10 percent of its annual sales, according to CNN.

Google is not alone in current legal battles with the EU; Apple and Facebook are already facing fines related to taxes and competition. The commission assured reporters at the event on Tuesday that American firms are not being “disproportionately targeted.”

“As a result of Google’s illegal practices, traffic to Google’s comparison-shopping service increased significantly, whilst rivals have suffered very substantial losses of traffic on a lasting basis,” said the EU, and provided evidence of a 45 percent increase in traffic for Google’s shopping site.

Google has 90 days to change its current strategy or it could face further fines and consequences; additionally, advertisers who feel damaged by Google’s current practices may decide to withhold support until and unless the company addresses these concerns.