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Google fined record $2.7bn by EU for favouring its own e-commerce service

The European Commission found Google systematically giving its own comparison shopping service prominent placement in search results, demoting those of rivals.

business Updated: Jun 27, 2017 16:40 IST
Google now has 90 days to end its anti-competitive practice or face penalty payments.
Google now has 90 days to end its anti-competitive practice or face penalty payments.(Reuters file photo)

European Union antitrust regulators hit Alphabet unit Google with a record 2.42-billion-euro ($2.7 billion) fine on Tuesday, for illegally favouring its own online shopping service in its search results. The move indicates the European regulators will likely take a tough line with the Silicon Valley giant in two other ongoing cases.

The European Commission said the world’s most popular internet search engine has 90 days to stop favouring its own shopping service or face a further penalty of up to 5% of Alphabet’s average daily global turnover.

The commission found Google systematically giving its own comparison shopping service prominent placement in search results, demoting those of rivals.

“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,” European Competition commissioner Margrethe Vestager said in a statement.

Google has “respectfully” disagreed with the EU action.

“We respectfully disagree with the conclusions announced today (Tuesday). We will review the (European) Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” Kent Walker, the company’s senior vice-president and general counsel, said in a statement.

The action came after a seven-year long investigation prompted by scores of complaints from rivals such as US consumer review website Yelp, TripAdvisor, UK price comparison site Foundem, News Corp and lobbying group FairSearch.

This is the biggest fine for a single company in an EU antitrust case, exceeding a 1.06-billion-euro sanction handed down to US chipmaker Intel in 2009.

It is also the biggest regulatory setback for Google, which settled with US enforcers in 2013 with a requirement to stop “scraping” reviews and other data from rival websites for its own products.

The EU competition enforcer has also charged Google with using its Android mobile operating system to crush rivals, a case that could potentially be the most damaging for the company, with the system used in most smartphones.

The company has also been accused of blocking rivals in online search advertising, with the Commission warning of deterrent fines if Google is found guilty of breaching EU rules.