The European Commission has fined Google a total of €2.42bn after it ruled the company manipulated its search engine results by promoting its own shopping comparison service.
The Commission’s investigation found that by giving illegal advantage to its own service, Google did not give consumers a real choice or a level playing field for rival firms, thus breaking antitrust rules. Whilst market dominance is, as such, not illegal under EU antitrust rules, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition.
Google must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
This is an important step forward in regulating the complex practices of global tech giants, more so after the Tory government gave Google a free pass last year when settling a tax deal of only £130m (the equivalent of 3% tax rate).
Commissioner Margrethe Vestager, in charge of EU competition policy, said: "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."
Commenting on the decision Jude Kirton-Darling MEP said, "This is good news for online shoppers and shows the important role the EU can play in tackling bad behaviour by multi-national companies who have huge clout and deep pockets".
Paul Brannen MEP added, "Small countries would definitely think twice about taking on a multinational the size of Google and even a major economy like the UK would hesitate. The collective power of the EU gives strength and safety in numbers and enables the over mighty who misbehave to be held to account".
Google Shopping, the company’s flagship product, was first introduced in 2004 (under a different name) and it allows consumers to compare products and prices online and find deals from online retailers of all types. For more information on the investigation and how Google breached the rules, please visit the European Commission website.