EU fines Google €2.42 Billion after Anti-trust investigation

  

Google has come up with many innovative products and services that have made a difference to our lives. 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.

 

Since 2008, Google implemented changes to their strategy to promote their comparison shopping services, giving them what the EU defined as an “illegal advantage”.  Below are two of Google’s main changes in policy, the second of which is certainly morally wrong. 

These changes were implemented in all EEA (European Economic Area) markets where Google has rolled out their comparison shopping services. 

  

• Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google’s comparison shopping service wants to show results, these are displayed at or near the top of the search results.
• Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google’s search results on the basis of Google’s generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. Evidence shows that even the most highly ranked rival service appears on average only on page four of Google’s search results, and others appear even further down. Google’s own comparison shopping service is not subject to Google’s generic search algorithms, including such demotions.

 

Since these changes, Google’s comparison shopping service seen a 45-fold increase in traffic in the UK, a 35-fold increase in Germany, a 19-fold increase in France, a 29-fold increase in the Netherlands, a 17-fold increase in Spain and 14-fold increase in Italy. Competing websites were found to have reductions in traffic of up to 92%, with the sudden drop in traffic being unexplainable by other factors. Many of these competing services were forced to close down, though some are still active. 

The EU Commission found that Google’s practices stifled competition on the merits in comparison shopping markets and in doing so have deprived European consumers of genuine choice and innovation.

Google now has 90 days to pay their fine or face penalty fees that can be up to 5% of the daily worldwide profit of Alphabet, Google’s parent company. 

 

You can join the discussion on the EU fining Google for anti-competitive practices on the OC3D Forums. 

 

  

Google has come up with many innovative products and services that have made a difference to our lives. 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.

 

Since 2008, Google implemented changes to their strategy to promote their comparison shopping services, giving them what the EU defined as an “illegal advantage”.  Below are two of Google’s main changes in policy, the second of which is certainly morally wrong. 

These changes were implemented in all EEA (European Economic Area) markets where Google has rolled out their comparison shopping services. 

  

• Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google’s comparison shopping service wants to show results, these are displayed at or near the top of the search results.
• Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google’s search results on the basis of Google’s generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. Evidence shows that even the most highly ranked rival service appears on average only on page four of Google’s search results, and others appear even further down. Google’s own comparison shopping service is not subject to Google’s generic search algorithms, including such demotions.

 

Since these changes, Google’s comparison shopping service seen a 45-fold increase in traffic in the UK, a 35-fold increase in Germany, a 19-fold increase in France, a 29-fold increase in the Netherlands, a 17-fold increase in Spain and 14-fold increase in Italy. Competing websites were found to have reductions in traffic of up to 92%, with the sudden drop in traffic being unexplainable by other factors. Many of these competing services were forced to close down, though some are still active. 

The EU Commission found that Google’s practices stifled competition on the merits in comparison shopping markets and in doing so have deprived European consumers of genuine choice and innovation.

Google now has 90 days to pay their fine or face penalty fees that can be up to 5% of the daily worldwide profit of Alphabet, Google’s parent company. 

 

You can join the discussion on the EU fining Google for anti-competitive practices on the OC3D Forums.