Google hit with a massive $2.7 billion fine in the EU for 'abusing its market dominance' in search

By Harish Jonnalagadda
last updated

A Bloomberg report from yesterday suggested Google could be hit with a record fine by the European Union's antitrust regulator over the company's alleged manipulation of search results. The regulator has now announced that it is levying a $2.7 billion fine on Google for abusing its dominance as a search engine by giving an "illegal advantage" to its own comparison shopping service.

The EU states that Google favored its own price comparison engine — Google Shopping — over rival services, thereby denying companies the ability to compete. From EU Commissioner Margrethe Vestager:

Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its 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.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.

According to the ruling, Google's manipulation of search results has led to a significant decrease in traffic for rival comparison shopping services, amounting to as much as a 85% drop in countries like the UK. At the same time, the commission found that Google's own service picked up a 45-fold increase in traffic in the UK. As noted by the EU:

These sudden drops could also not be explained by other factors. Some competitors have adapted and managed to recover some traffic but never in full.

The EU said it decided to impose the fine after conducting a thorough investigation in which the commission reviewed documents from Google and "other market players," analyzed 1.7 billion search queries, pored through click-through rates along with financial and traffic data.

The EU commission is giving Google 90 days to stop its "illegal conduct" and tweak its search algorithm to favor rival services just as favorably as its own:

Google has to apply the same processes and methods to position and display rival comparison shopping services in Google's search results pages as it gives to its own comparison shopping service.

Failing to comply with the decision will allow the EU to fine Google up to 5% of its daily turnover. Given the impact of the EU's investigation and the fact that it affects Google's core business, the company is likely to appeal the decision. Google has previously affirmed that its practices were well within the confines of the law, and the search giant is doing the same this time around. In a statement, Google said:

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.

This isn't the only antitrust investigation Google is facing in the EU: the company is also facing charges for preferring its own services on its Adsense for Search platform, and bundling Google Search as the default search engine on Android.

Harish Jonnalagadda
Harish Jonnalagadda
Senior Editor - Asia

Harish Jonnalagadda is a Senior Editor overseeing Asia at Android Central. He leads the site's coverage of Chinese phone brands, contributing to reviews, features, and buying guides. He also writes about storage servers, audio products, and the semiconductor industry. Contact him on Twitter at @chunkynerd.

70 Comments
  • This is just the First EU investigation which cost Google nearly 3 Billion and the other two are much bigger cases as they relate to Adsense and Android respectively. Expect, At least $10 Billion as the total fines over all these Anti trust cases.
  • Well, UK is leaving EU so they need to patch the budget hole... I expect even more of this in the near future, not necessarily Google being a victim...
  • The most ridiculous comment you could possibly have made. This has NOTHING to do with the UK's decision to leave the EU. In the past the regulator has also fined Microsoft and made Apple stump up for taxes. The EU isn't "patching the budget hole" it is standing up for its citizens. What this is, is Google taking advantage of its position. Google isn't the victim and it has done wrong by EU rules. Therefore it should pay.
  • And that is your opinion, you have rights to have one. Mine is above... Any problem with that??
  • Apperantly the entirety of the EU does. And probably anyone who read the report.
  • So you're saying the good people of the EU are too stupid to use another search engine or know that people actually pay money to put ads on Google? Talk about a nanny state!!!
  • If the EU was doing such a good job standing up for its citizens your country wouldn't be in the process of leaving it.
  • Very spurious logic. You assume the general populace votes in its own best interest, there's little evidence of that being true.
  • We don't know either way do we. From the outside looking in, Britain was just a tool for France and Germany to use to their advantage. Britain was always playing 2nd fiddle to those 2.
  • That's actually what people do vote. In their own interest. Not for the benevolent dictator to tell them what to do.
  • I never said EU is cool and dandy. It is a bunch of corrupted office clerks w/o common sense in many areas. UK is leaving for many other reasons. Some of them silly, some have merit. What is certain is the budget hole that will be left after UK's exit. This budget hole need to be patched in some way... Charging ANY business overblown penalties is one way...
  • My comment was for Richard not you.
  • Sorry, need to take some smart reading lessons :)
  • You just sound like you're blindly defending Google. They did wrong, they got punished. Just as Microsoft and Apple did before them and no doubts others will after. Amazon has some pretty shady practices with regards taxes and loopholes. Sure they'll be under scrutiny at some point.
  • Why is it Google's job to make sure their competitors are successful? Give me a legitimate answer.
  • Because it's the law. It may not be a law you agree with, but it is the law. What more legitimate reason could there be?
  • What law did they break,,,just curious since the EU does have many oppressive laws.
  • It's not, but they broke the EU laws. It's as simple as that. The US fined them 500 million for illegally allowing Canadian drug companies for placing ads in the US. 22 million for violating privacy laws. Should the US not have fined them for breaking our laws?
  • I still don't see how Google did anything wrong. If you use their search engine expect to get whatever search results they offer. Don't like it, use another search engine. Unlike what Microsoft did which was not allow another browser option. Google has never prevented you from other options. Not even in Chrome OS.
  • Microsoft's lawsuit wasn't because they didn't let you use other browsers, it was because they didn't make it obvious how to change it.
  • Microsoft always allowed the use of competitive browsers if you knew how to install them but they never allowed browser options during the installation. Since most people didn't know what a browser was and were less likely to know how to install one, they cornered the market.
  • Are people that lazy or are they so stupid they won't take 5 minutes to figure it out so they go running to big brother.....
  • We're not leaving it based on how it treats tech companies.
  • I personally don't care that you're leaving it at all. My comment was for the sake of my argument.
  • Google has 100 billion in cash, for them to pay just 3 billion is nothing. Google should respect the EU
  • F&$@ the EU. Something France and Germany invented to artificially prop up their economies.
  • Google should just give the EU the one fingered salute and pull out all Google services and see the EU users complain then..
  • No, they should leave the EU, leave them high and dry
  • Seeing how the EU countries can't even afford to fully fund their own militaries, they have to get money from somewhere.
  • We do have money. But unlike other places like good old 'murica, we prefer to fully fund other things like public education and a national health system for everyone. You know... Priorities.
  • Priorities? Yeah until someone sweeps in and kicks your a$$es. What then?
  • Yeah, how's that fully funded healthcare system working for ya? And you have what, one good university and it's private? Try footing your own bill with a military instead of stealing from American's you bunch of cowards.
  • I really still don't get this statement: "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." Does the EU also force retailers to advertise other comparable retailers in their own stores??? If shoe store X has a 2 for 1 sale and shoe store Y has a 3 for 1 sale is shoe store X mandated to advertise and inform their customers of shoe store Y's sale. You are playing in Google's store by using their search engine. You can always choose another search engine if you don't like Google's results. I don't search Ebay to find a better deal on Amazon. How can this be illegal??? Am I missing something?
  • I was thinking the same thing. All this arguing over the US vs Europe or following EU rules. Google is not forcing anyone to use their products, website's or apps. You have an option. I shop using Google search, Amazon and eBay to find the best deal. Do people in Europe not have the same abilities to use other websites to shop? This is where I am confused as well. As for Apps, the beauty of Android is you can use anything as your primary. One of the knocks on Android has always been letting too many developers in and diluting the quality of the apps. I will be interested to see how this goes.
  • Thanks for getting this case right Harish. Florence incorrectly reported yesterday that this was the AdSense case. Hopefully the comments today will be less "Murica, and EU is just picking on US companies" than I saw yesterday. It was embarrassing to read. I guess those guys don't realize US companies only make up 15% of the EU investigations.
  • America first any and every time. If you don't agree leave and if you're not here don't come. This is predominantly an American site regardless of what the AC guys might say.
  • I am American, but I also realize if Google violated EU law they should have to pay a fine. I just don't get those that don't understand that companies can't get away with violating other countries' laws without penalty. It seems Google can do no wrong on this site, and it's always somebody elses fault when they falter, break the law, etc.
  • Sigh. Then this doesn't really bother you does it, because it's a legal matter in a part of the world you clearly don't care about.
  • I know I don't. Maybe once the terrorist acts stop but for now, you can have the EU!
  • Revolutionary thinking: just because you're American, doesn't mean you have to be an arsehole. This is a predominantly US site, but predominantly doesn't mean solely, and when there's an article about Europe written by a gentleman from India, it might be time to learn to share the toys with the other children.
  • America pours money into Europe's defense. Money that could be spent in America so it pis*** me off when Europe tries to screw over anything American. We don't get a fair return on the investment. I'm guessing you're from Europe so you wouldn't understand.
  • It's mutual, the only real reason the UK maintains its nuclear arsenal is because of its defence pact with the US. You really think the US just throws money at other countries without benefit? Get real. As you say, it's America first.
  • I would suggest you be more concerned with how the EU is going to take Britain to the cleaners with that break-up fee. You guys can't even self-govern without having to pay. Long live the EU. LOL.
  • The UK maintains its nuclear arsenal for its own defense not America's. We have more than enough nukes without you guys.
  • Those nukes are there to protect you primarily. Russia would run all over you in a matter of days without us.
  • God forbid you should check any facts.
    America does NOT fund ANY European military. Starting with the fact that there ISN'T an European army. Each European country has its own army. What the US funds is NATO. And you know why? Because it was YOUR idea. And because NATO is mostly used to fight YOUR wars every time your economy is in the red and you need a war to be able to sell weaponry.
    But we'll do this: we'll disband NATO. And then we'll see how America manages to fight their wars in the middle-east once you're no longer allowed to move armament across Europe freely. And what happens to American economy once you're not able to sell weapons "to allies" easily anymore.
    And when because of that, you're no longer able to pay China for their loans to you (or have you forgotten that China pretty much OWNS the US economy because they keep buying your debts?)
  • Please, Europe will always be America's lapdog.
  • And once Russia invades mainland Europe us Americans can just go on with our daily lives. So lets please do dismantle Nato. You guys are irrelevant on the world stage and don't even realize it.
  • Wow. With ass#oles like you it's no wonder why Trump won. One can only hope Republicans loose control of Congress during mid term elections.
  • I didn't vote for Trump clown. I don't agree with 99% of what he says but some things that he says are the truth. Europe benefits more from Nato than America does.
  • Mate, Europe benefits ZERO from NATO. Zero. Also, I don't know if you've realised but the ones turning irrelevant in the World stage are YOU, the US. You're China's little b*tches and you don't even allegedly elect your own Presidents, Russia does.
    You have a debt you can't pay or sustain, a massive racial problem in society and now a President who isn't respected by anyone worldwide. You're becoming more and more isolated from the World and you know what happens next? No, it's not "Europe gets screwed". It's more like "American Corporations leave America". But then again, you're clearly a full blown redneck, the type that gives America a bad name. You say you didn't vote for Trump? You should have. Though even Trump is a little less stupid than you, mate ;)
  • NO. Trump won because people hate Hillary. She's a lying, thieving, murdering sub human. You dems lost in 2012 when Obama stole a second term. You lost in 2012, 2014 and 2016. You even lost a rigged election! People are leaving the Democrat party all the time now and going Independent or right because you people have gone so far left. JFK would be turning over in his grave.
    If you keep up the antics you're doing now, you won't see a change for about 25 years if ever. Wake up!!
  • Marshall Plan...http://marshallfoundation.org/marshall/the-marshall-plan/ and we're still doing it. How much do you give to NATO? Get rid of NATO? That'll never happen because NATO would cease to exist. Selling weapons? We don't need NATO for that. America is the most prominent nation on earth. We give more aid than everyone else combined. Next time you see an American soldier there, say thank you and move on.
  • Not sure if you realize this, but all companies operating in Europe need to follow European laws. It doesn't matter whether they have an office in America as well. Would you be okay with a European company that operates in America breaking American laws?
  • Dude seriously, shut your ignorant hole. Your making the rest of us Americans look bad.
  • Yeah... That's how the comments always go on these sorts of articles, jingoists get jingoistic. Never seems to occur, even then pointed out, that the main reason Americans don't hear when sanctions are levied against non-US companies is because they don't care... Pretty simple, if you do business in ANY region and don't follow the rules, you get penalised.
  • So I take it you support US immigration laws as it pertains to foreigners?
  • Good, Google/Alphabet deserves it. They have been doing what Microsoft was told to stop doing years ago. I applaud the EU for this and I hope the next two cases slap them with even higher fines.
  • Probably one of the most dull and by far lame fines in history. I never even use add search to buy anything since it clearly says sponsored. Not to mention Amazon does the same thing and they are way bigger than Google in the shopping game.
  • Yeah, that's what I don't get. I totally agree with the principal but not necessarily the reality. I realize I'm just a dull normal, and I'm not as smart as a gov't lawyer or bureaucrat. But It seems like picking on Google is a bit of an easy target. I'm sure everyone else who has the opportunity to cross-promote their services is going to take advantage of it. And I'm not convinced Google is actually fudging their results. Typically their products are overall much better than the others and more people actually choose to use Google's service. Take some EU based service, and see if they aren't using their most popular service to promote some of their other services.
  • Interesting...Google gets hit with record fine and cyber attacks hitting widespread Europe/Ukraine and another attack in Ohio this morning. Hmm! Coincidence? I think not.. Google's doing a big FU to the EU/world! HAHAHAHA
  • @DJCBS. How soon you Europeans forget! You would be answering these here comment sections in German if it weren't for us Muricans. So please just say Thanx and save the insults for the people who continuously attack your current way of life with bombings and terror. You will be surely looking for our assistance once again. Oh and thanx for all the futbol talent that prefers to play in Murica! Good Day to all!
  • I think they'd be answering in Russian instead of German.
  • Antitrust laws are good. EU's implementations suck. They seem to just cherry pick whatever corporation people like to complain about. One day it's microsoft with it's web browser, the other it's google with their results, when's apple's turn for locking down software on IOS?
  • Wait. Microsoft will be soon charged with noncompetitive stuff for providing own antivirus... Kaspersky already started the accusations and EU seem to be very keen on fining large corporations...
  • Awesome news. Now US courts please fine them on the Nexus 6P debacle too. They need to be fined so they won't mess up again with consumers. And please let the fines be bigger so it hit them harder and be felt. Hit them where it hurts
  • People don't seem to understand how corporations work. They need to turn a profit so if operating cost or overhead increases due to fines then the cost of their product will increase to make a profit. They just transfer the fines to the consumers by charging more for their next products. If you don't like a company, or the products they make, then the best way to "hurt" them is to stop purchasing or using their products. Stop using Google and it goes away. The problem is people like Google, their services and even some of their hardware or else they would have already disappeared like MySpace and Palm. Fines should be levied when egregious acts of incompetence or malice are implemented which does not seem to be the case here.
  • 2.7B is just peanuts for Google.
    it should have been 100B min
    rigging the results = murdering jobs of billions of people in various diaspora
  • Murdering the jobs of billions??? I think your math is off.
  • If you want to know why the UK voted for Brexit, look no further than this maliciousness from the arrogant a**holes in Brussels. EU is a great idea made untenable by its authoritarian implementation.