European Commission Fines Google $2.7 Billion

The European Commission has fined Google a record $2.7 billion for violating EU antitrust rules, saying it has "abused its market dominance in search" and gave "illegal advantage" to its own comparison shopping service over competitors. Google says it is pondering an appeal.

Google has to end the anticompetitive conduct in 90 days or face a potential ongoing additional fine of up to 5% of the average daily worldwide business of its parent company, Alphabet.

Google is also liable for civil action by individuals in the courts of the affected European Economic Area (EEA) countries.

"Google has come up with many innovative products and services that have made a difference to our lives," said commissioner Margrethe Vestager, who heads up competition policy. "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." 

“When you shop online, you want to find the products you’re looking for quickly and easily," said Google senior VP and general counsel Kent Walker. "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.  We respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”

At issue was Google Shopping, which the commission said Google favored by demoting rivals in search results, "[relying] on Google's dominance in general internet search, instead of competition on the merits in comparison shopping markets."

The commission said the record fine was based on the value of Google's revenue from Google Shopping in the 13 affected EEA countries.

The decision includes the finding that Google is dominant in search throughout the EEA.

Google is also under EC investigation over the Android operating system and allegations it has stifled choice in mobile apps and services, as well as for AdSense, where the EC says Google may have prevented websites from sourcing search ads from Google competitors. 

The commission has already concluded, preliminarily, that Google abused its dominant position in those two cases as well.

(Photo via Yanni Koutsomitis' Flickr. Image taken on Sept. 29, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 9x16 aspect ratio.)

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.