Google hit with record €2.42bn fine by EU for demoting rivals’ search results

European competition commissioner Margarethe Verstager with European Commission vice-president for competitiveness Jyrki Katainen.

The European Union competition regulator has fined Google a record 2.42bn euros ($2.7bn), indicating it will  take a tough line with the company 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 parent company Alphabet’s average daily global turnover.

The Commission found that Google had systematically given prominent placement in searches to its own comparison shopping service and demoted those of rivals in search results. “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.

The action comes 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 1.06bn euro sanction handed down to US chipmaker Intel in 2009. It is also the biggest regulatory setback for Google, which settled with US regulators in 2013 with a requirement to stop “scraping” reviews and other data from rival websites for its own products.

The EU competition regulator 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.

In a response, Google hinted that the complaints boiled down to other sites’ lack of growth: “When the Commission asks why some comparison websites have not done as well as others, we think it should consider the many sites that have grown in this period – including platforms like Amazon and eBay,” said Google’s senior counsel Kent Walker.

“With its comparison tools, reviews, millions of retailers, and vast range of products from sneakers to groceries, Amazon is a formidable competitor and has become the first port of call for product searches. And as Amazon has grown, it’s natural that some comparison services have proven less popular than others. We compete with Amazon and other sites for shopping-related searches by showing ever more useful product information.

“When you use Google to search for products, we try to give you what you’re looking for. Our ability to do that well isn’t favouring ourselves, or any particular site or seller – it’s the result of hard work and constant innovation, based on user feedback. Given the evidence, 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.”