Google Fined Record $2.7 Billion By EU For Alleged Online Search Misdeeds

Google fined £2,100,000,000 for manipulating search results

Google is a company that wears many hats, so many hats in fact that they've had to create a new parent company, Alphabet, to house all the different products and services that Google has created over the years.

The European Commission, which polices EU competition rules, alleges Google elevates its shopping service even when other options might have better deals. The EU's antitrust chief, Margrethe Vestager, charged that similar products competing with Google were often ranked much lower in search (if you're not on the first page, you're basically dead).

"That's a good thing".

The fine centers around Google's comparison shopping service - which has been known by names from Froogle and Google Product Search to Google Shopping - and its prominent display in related search results.

A years-long analysis of Google's online search results showed that the company lists links to its own online shopping services above those of rivals, European regulators said.

She ruled that Google is cheating both its users and its advertisers, pointing out that Google "provides search results to consumers, who pay for the service with their data", and added "almost 90% of Google's revenues stem from adverts, such as those it shows consumers in response to a search query". "It has prevented other companies from competing on the basis of their merits, and innovate".

The commission's investigation revealed Google's own doubts about the comparison platform, with internal emails from the tech giant in 2006 saying the service "simply doesn't work".

Alphabet, whose shares were down about 1 percent, said in a separate statement it would review the Commission's formal decision but expected to accrue the fine in the second quarter.

The fine was calculated based on Google's reported earnings from its comparison shopping service in the 13 EEA countries involved.

A rep for Google tells Reuters that the company respectfully disagrees with the Commission's finding.

Google is also under EC investigation over the Android operating system and allegations it has stifled choice in mobile apps and services, as well as for AdSense, where the EC says Google may have prevented websites from sourcing search ads from Google competitors.

Google must change the practice within 90 days or face additional fines up to 5 percent of its average daily worldwide revenue (estimated to be around $14 million per day). It's reasonable to assume that a bulk of that $2.548 billion was spent with Google. It also claims that "thousands" of smaller retailers in the European Union use these top-tier listings to compete with larger companies like Amazon and eBay. "You always find the Google Shopping unit right in front of you, where we know that most clicks can take place".

The companies "have watched Google undermine competition in the United States and overseas", they said in the June 26 letter.

The Commission's investigation first began in 2010 after it received complaints from rivals such as Yelp, UK comparison site Foundem, and other groups.

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