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European Commission fines Google $2.7 bn over Shopping results

28 June 2017

"This is not competition on the merits and is illegal under European Union antitrust rules".

The penalty payment for failure to comply would amount to around $12 million a day based on Alphabet's 2016 turnover of $90.3 billion.

Google has been fined a record €2.42 billion ($2.7bn/£2.1bn) by the European Commission after a seven year investigation sparked by Microsoft and other firms, found that the company had unfairly promoted Google Shopping above other similar shopping comparison services on its search site.

Google entered separate market of comparison shopping in Europe in 2004 with "Froogle", later renamed Google Product Search in 2008 and then Google Shopping in 2013.

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Google has indicated it intends to appeal the ruling.

According to the European Commission (EC), the executive arm of the EU, Google systematically gave prominent placement to its own comparison shopping service over the results of competitors. As a result, retailers not included in Google Shopping results are put at a disadvantage, as are sites offering their own price comparison services, and it's a disadvantage serious enough for the European Union to levy its record-breaking fine.

Margrethe Vestager, a commissioner responsible for competition policy, said: "Google has come up with many innovative products and services that have made a difference to our lives". Instead, Google abused its market dominance and promoted its own services, Vestager emphasised.

"When you shop online, you want to find the products you are looking for quickly and easily".

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The company will review the decision and consider an appeal. Google put its shopping results at the top of its search page because it had seemingly put a lot of work into the shopping results algorithm and believed it would provide the best results for its users. "This has deprived European consumers of the benefits of competition on the merits, namely genuine choice and innovation".

The Google chief concluded: "Given the evidence, we respectfully disagree with the conclusions announced today".

As just a handful of largely American companies have become global tech monopolies, regulators in the USA have done little to deter anticompetitive practices.

But a "non-discrimination obligation" imposed on Google could make a "bigger difference to a broader number of companies and make a massive difference to Google and its ability to self-promote its own stuff", said Mr Tim Cowen, a lawyer at Preiskel & Co. One concerns the Android operating system, the other AdSense.

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European Commission fines Google $2.7 bn over Shopping results