On 27 June 2017, the European Commission announced that it has issued a decision imposing a record € 2.42 billion fine on Google for abusing its dominant position as an internet search engine by giving an illegal advantage to its own comparison shopping services in violation of Article 102 TFEU. The decision also requires Google to end its anticompetitive conduct within 90 days.
According to the press release of the Commission, Google is dominant in each national market for general internet search in all 31 European Economic Area (EEA) countries, exceeding a 90% market share in most. The Commission found that Google has abused this market dominance by leveraging its position in general internet search into the separate market for comparison shopping services in 13 EEA countries by giving preferential treatment to its own service "Google Shopping" (formally Froogle) over those of its competitors. In particular, it gave prominent placement to its own comparison services by displaying them at the top in its search result pages or in a reserved space on the right-hand side. It also demoted rival comparison shopping services through the criteria it introduced in its search algorithms. Google's own services were not subject to those algorithms.
As a result of this preferential treatment, Google's comparison shopping service was allegedly much more visible to consumers in Google's search results and consequently received more traffic compared to rivals, while traffic to rivals' shopping services dropped substantially. This in turn made it more attractive for retailers to want to list their products on Google's comparison shopping service. The Commission found that the conduct therefore "stifled competition on the merits with the effect that consumers were deprived of genuine choice and innovation".
The decision imposed a record fine of € 2.42 billion on Google, which represents the duration and gravity of the infringement and was calculated on the basis of Google's revenue for its comparison shopping service in the 13 countries concerned. The decision also requires Google to explain to the Commission within 60 days how it will end its illegal practices. Google must implement those changes within 90 days of the decision or it could be liable for penalties of up to 5% of the average daily worldwide turnover of its parent company, Alphabet.
The Commission's decision represents a major milestone in the case which has been ongoing for seven years. A formal investigation was launched in 2010, following complaints from a number of competitors (see VBB on Competition Law, Volume 2012, No. 5, available at www.vbb.com). In 2013, Google proposed a settlement to resolve the competition concerns raised, but this was opposed by rivals (See VBB on Competition Law, Volume 2013, No. 4, available at www.vbb.com). Following two further failed attempts at settlement, and a change in the Commissioner for Competition, a formal statement of objections was sent to Google in April 2015 (See VBB on Competition Law, Volume 2015, No. 4, available at www.vbb.com).
Google has said that it is carefully reviewing the recent decision with a view to potentially bringing an appeal.
EU Competition Commissioner, Margrethe Vestager, has described the investigation's finding that Google is dominant in general internet search services as an "essential" finding which could provide the starting point for investigations into Google's other services, such as Google Maps and Google Images.
Google is currently subject to two other investigations by the Commission into alleged abuses of a dominant position relating to its Android operating system and its online search advertisement tool AdSense.
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