Europe fines Google record $2.7 billion for abusing market dominance

Investing.com – The European Commission (EC) hit Google with a record fine of €2.42 billion ($2.7 billion) Tuesday for abusing market dominance.

“Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service,” the EC declared on Tuesday.

The ruling for a breach of European Union (EU) antitrust rules requires to end the conduct within 90 days or or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet (NASDAQ:GOOGL), Google's parent company.
Commissioner Margrethe Vestager who heads EU competition policy praised Google’s “many innovative products”, but said that the comparison shopping service wasn’t just about attracting customers by making its product better than rivals.

“Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors,” Vestager claimed.

“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," she concluded.

Google argues against the ruling, naming Amazon as a competitor
Google’s general counsel Kent Walker responded to the ruling via the company blog.
He explained that users want to find the products they’re looking for quickly and easily.

“We believe the European Commission’s online shopping decision underestimates the value of those kinds of fast and easy connections,” Walker argued.

“While some comparison shopping sites naturally want Google to show them more prominently, our data show that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches,” he explained.

Walker also noted that the EC should consider that many sites that have grown in this period, citing platforms like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY).

“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,” Walker stated.

“We compete with Amazon and other sites for shopping-related searches by showing ever more useful product information,” he added.

“Given the evidence, we respectfully disagree with the conclusions announced today,” Walker said.
“We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” he concluded.

Waiting for the U.S. open, shares of Google parent Alphabet Inc C (NASDAQ:GOOG) were down 1.50% to $938.00 in pre-market trade.