Harsh times for the Internet giants: Google fined for violating EU antitrust rules

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On 27 June 2017, the European Commission has decided to impose a fine of € 2.4 billion on Google for breaching EU antitrust rules. The amount of this record fine considers the “duration and the gravity of the infringement”, and was based on Google’s revenues in the 13 European countries where the infringement occurred. This penalty follows a recent series of decisions the Commission has taken against tech companies in Europe, namely the investigations on Amazon’s tax practices, the ruling on Facebook’s data handling and the Apple ruling in Ireland.

According to the competition watchdog, Google has violated Article 102 TFEU and abused of its dominance in the internet search market, most notably by promoting its own comparison shopping service named ‘Google Shopping’ in its search results. This practice has deprived consumers of a genuine choice of services and hindered the freedom of competition within the market.

 Most notably, Google has exploited its dominance by giving priority placement to its comparison shopping results, which used to display on top of the internet search results while demoting the others. Google’s comparison shopping service appeared then much higher in Google’s search results while rivals’ comparison services were demoted and relegated.

This practice has significantly increased the amount of digital traffic to Google’s comparison shopping service, whilst rivals have suffered substantial losses of flows on a lasting basis. Indeed, relegating results from rivals to areas where potential buyers are less inclined to click had a significant impact on competitive services and consumers’ choices.

The European Commission has then concluded the company has leveraged its dominance and hindered competition in the comparison shopping market, as all evidence shows that consumers are generally more prone at clicking on search results that are placed on the first search results page rather than on subsequent pages.

The Commission has required Google to put an end to this infringement within 90 days of the decision, to refrain from adopting measures having equivalent effect and to provide equal treatment to all the comparison shopping services. Furthermore, Google may also face civil actions brought by persons affected from this conduct to claim for compensation before Member States courts.

However, Google has already taken its first steps to comply with the European Commission’s requests and submitted a remedy proposal to amend its comparison shopping service. Therefore, even though Google initially suggested its intentions to appeal this decision, it seems the company has considered compliance as the safest option.

 

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