Bad news for Google.
The European Commission has fined the tech giant a record 2.42 billion ($2.72 billion; 2.13 billion) for “abusing dominance as search engine” by promoting its own shopping comparison service over others.
It’s a massive fine that could mark a turning point for how governments regulate increasingly dominant tech companies. The emergence of Google along with other companies like Facebook and Amazon have begun to cause concern about their market power.
The fine comes from Europe but many of the complaints come from American companies that have claimed that Google’s search engine did not play fair when people looked for products.
While some welcomed the fine, others in the tech community felt the EU had oversteppedparticularly with the amount of the fine.
Hell, Google’s shopping service isn’t worth $2.7 billion. 2/
Jeff Jarvis (@jeffjarvis) June 27, 2017
But it’s not just Google. Facebook was recently on the business end of a $122 million fine over what the European Commission claimed was misleading information related to the acquisition of WhatsApp.
The ruling also puts a 90-day deadline for Google to end its anti-competitive practices or risk paying up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.
“Google has come up with many innovative products and services that have made a difference to our lives,” Commissioner Margrethe Vestager said.
“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,” she added.
“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.”
Google has said it will appeal.
“When you shop online, you want to find the products you’re looking for quickly and easily,” a spokesman said after the ruling.
“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.”
Europe’s willingness to go after tech companies with investigations into competitive practices is particularly stark as U.S. regulators have remained quiet on these issuesa topic that is becoming the source of growing critique.
And American antitrust regulators know they look stupid. Leadership has been elsewhere for some time.
Matt Stoller (@matthewstoller) June 27, 2017
More to follow…