Google fined $2.7B by European Commission for abusing search monopoly

EU also rules that Google must stop demoting competitors in search results.

Credit: John Thys/AFP/Getty Images

Google has been gut-punched by the European Commission for abusing its search monopoly to squeeze out other players on the Web.

Brussels’ competition chief Margrethe Vestager has slapped Google with a €2.42 billion fine, the largest anti-monopoly penalty ever issued by the commission.

In addition to the fine, Google will be required to change its search algorithm so that every competing service is fairly crawled, indexed, ranked, and displayed. If Google fails to remedy its anti-competitive conduct within 90 days, it will face daily penalty payments of up to 5 percent of the worldwide turnover of the ad giant’s parent company Alphabet, the EC said.

Google claimed the price comparison results—which the multinational styles as “shopping”—it displays are “useful” and “an improvement” over the text-only ads it used to display. “Given the evidence, we respectfully disagree with the conclusions announced today,” wrote Kent Walker, Google’s general counsel. “We will review the commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”

The original complaint against Google was brought by UK comparison shopping site Foundem in 2009, and by 2010 the commission confirmed it was investigating alleged antitrust violations by Google. The commission formally issued a Statement of Objections (SO) against Google in April 2015 and has spent the last couple of years working out how hard to hit Google.

The commission’s investigation primarily sought to uncover whether Google’s search results systematically boosted the rankings of its other products—Google Shopping, for example—unfairly squeezing out companies that offer similar services to Google. Google’s most recent public rebuttal was in November 2016, arguing that improving the quality of its search results wasn’t anti-competitive.

Foundem said:

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.

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.

The European Commission has the power to issue fines of up to 10 percent of a company’s global turnover, though the largest monopolistic fine before today was €1.06 billion for Intel in 2008, or roughly 3 percent of Intel’s turnover at the time. For Google, €2.4 billion represents about 3 percent of its global turnover.

For more information, read our in-depth explainer on the long-running Google vs. Europe anti-monopoly case.