Google has been fined a record 2.42 billion (EUR) by the European Commission for abusing its dominant position by promoting its online shopping service to the detriment of its rivals.
After a seven year investigation into Google's practices, on Tuesday 27 June 2017, the European Commission (Commission) imposed a record breaking 2.42 billion (EUR) fine on Google for abusing its dominant position in the search engine market where it has a 90% market share by promoting its shopping comparison service at the top of search results. The fine is the largest imposed on a company for abusing its market position and the decision represents a novel form of abuse identified by the Commission.
Margrethe Vestager the European Commissioner for Competition commented on the fine saying that not only did Google promote its own service but it went further and demoted those of its competitors. The fine was set at a level that the Commission considers accurately reflects the seriousness and duration of the abuse The Commissioner further commented that: '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.'
In addition to the fine, Google has 90 days to change the way its search engine operates for shopping results, giving equal treatment to rivals - but the Commission has not specified exactly what form the alterations should take. If Google fails to comply with the Commission's order it could face daily fines of up to 12.5 million (EUR) a day which represents 5% of the average daily worldwide turnover of its parent company Alphabet.
In addition to the fine, Google is also likely to face potentially significant damages claims from third parties (such as price comparison sites and retailers) who may have suffered loss as a result of Google's conduct.
However, the case is unlikely to end here as Google disagrees with the Commission's findings and has indicated that it is likely to appeal the decision in the next two months. Google has continuously denied the claims made by the Commission, explaining that its innovations make it easier and faster for consumers to find what they are looking for online. Once it receives the final decision, Google will have two months to appeal.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.