EU ready to fine Google billions in shopping search antitrust case [Report]
In one of three active cases, the company faces potential fines of up to $9B.
After several months of silence, it appears that antitrust regulators in Europe are ready to fine Google for “abuse of market position” in shopping search — one of three active cases against the company. Reuters reported the news based on discussions with “two people familiar with the matter.”
The article says the fine will likely be imposed by August and could amount to up to 10 percent of the company’s global revenues, which last year were roughly $90 billion. In other words, Google parent Alphabet faces exposure of $9 billion in this single matter.
The fine has been anticipated for some time given Google’s inability to settle the case with EU regulators. The company has made several unsuccessful attempts — (e.g., “rival links“) — to settle with former European Commission competition czar Joaquín Almunia. Almunia’s successor, Margrethe Vestager, has taken a tougher line against Google.
The EU’s formal “Statement of Objections” (antitrust charges) in the case focused on comparison shopping, but other areas of search would potentially be vulnerable to similar claims (e.g., local/maps). The following were some of the verbatim claims that appeared in the Statement of Objections:
- Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits.
- Google does not apply to its own comparison shopping service the system of penalties which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.
- As a result of Google’s systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services.
Google has vigorously pushed back on the EU’s position, asserting that the evolution of its search results pages has been about improving quality and the user experience, which are beneficial to consumers:
Google has always worked to improve its services, creating new ways to provide better answers and show more useful ads. We’ve taken seriously the concerns in the European Commission’s Statement of Objections (SO) that our innovations are anti-competitive. The response we filed today shows why we believe those allegations are incorrect, and why we believe that Google increases choice for European consumers and offers valuable opportunities for businesses of all sizes.
Reuters is also reporting that the European Commission “will tell Google to stop its alleged anti-competitive practices.” That would presumably involve a change in how shopping search results are presented. It’s not clear specifically what that would mean. Google can appeal to the European Court of Justice should the penalties be imposed.
The two other active antitrust cases focus on exclusivity provisions in Google AdWords agreements and Android-OEM contracts and carry similar potential exposure for Google.