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EU hits Google with mother-of-all fines $2.7 billion for tampering with its search results

by Felix Omondi
european union antitrust commission

Google has been found guilty of breaking the European Union antitrust law and hit with a record €2.42 billion ($2.7 billion)

This ruling comes after a seven-years-long investigation the EU antitrust unit has been running on the search engine giant. An investigation that concluded with a judgment that reads Google “abused its dominant position by systematically favoring” their own platforms over their respective competitions.

This fine beats the former largest antitrust judgment to Intel back in 2009 handed by the European Commission, of €1 billion. The EU antitrust investigation narrowed down to Google Shopping, a feature the smart engine giant uses to compare commodities to consumers.

The commission tasked with the investigation states that the search engine showed users search results from Google Shopping “irrespective of (their) merits.” A move likely to set unfair price comparison between Google Shopping and its competition. The EU recommends that since Google is overly dominant across Europe, measures should be taken to ensure it does not muzzle competition.

The EU decision will force Google to change its search algorithm and how it ranks websites. This fine is meant to make Google to “comply with the simple principle of giving equal treatment to rival comparison shopping services and its own service.”

The magnitude of the fine is huge enough to dent even Google’s financial standing. Furthermore, the EU warns that should Google persist with its unfair competition practices; it stands to be charged daily penalties. Some of the penalties might be as high as 5% of the company’s average daily turnover.

Margrethe Vestager, the EU competition commissioner, who began by praising Google for its innovative solutions, says “many innovative products and services that have made a difference to our live. She went further to note that Google nonetheless, “abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.

Vestager further said, “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.”

What are Google’s options?

Well, Google could appeal the ruling in EU courts, which could delay the final resolution for some years.

Google made a statement saying, “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.”

Other Google woes

In addition to this just-concluded EU antitrust commission investigation on Google, the company has two more antitrust investigations. One of which is focusing the magnifying lens on Google’s AdSense business, while another is looking at the Android phone manufacturers.

Google could actually be charged as high as 10% of its annual revenue (standing at about $9 billion) by the EU in each of the investigations. The ruling made today also serves as a call-to-action on other companies to take up civil suits against the search engine giant.

The United States business community’s reactions

No doubt the European Union ruling on a US-found multinational will rub the US business community the wrong way. Already there are accusations from the business community that the EU is unfairly treating tech companies from America.

Last year, Vestager was under fire for forcing Apple to pay Ireland a sum of €13 billion in back taxes. Although the EU rebuts these claims and goes further to say there are no data to support them. For clarity, between the year 2010 and 2017, of all the companies investigated by the EU, 15% hit US companies while 75% hit European firms.

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