June 30, 2017

Google Gets Slapped With Record $2.7 Billion Fine For Manipulating Search Results

The US tech giant ‘Google’ has been hit with a record-breaking $2.7 billion (€2.42 billion) fine on Tuesday by the European Union for unfairly manipulating search results in a way that gives an “illegal advantage” to its own services while harming the company’s rivals. The decision follows a seven-year investigation into the Google’s search algorithms, which ended with the judgment that Google had “misused its market dominance as a search engine by systematically favoring” its own shopping comparison service.

Google to be fined


In 2010, the European Commission has launched an investigation after several rivals have complained. The primary target of the case is a price-comparison feature built into the company’s search engine – Google Shopping. It has been using its search dominance to distort search-engine results to promote its own shopping comparison service at the top of all search results while demoting those of competitors.

The European commission’s antitrust filing states that Google showed users results from Google Shopping “irrespective of [their] merits,” depriving rival price comparison sites of traffic.

Google shopping
Google Shopping box is displayed above other results

As of now, this is the ‘biggest even financial penalty’ against the internet tech giant for breaking EU antitrust law. The Commission says the amount of penalty has been calculated from Google’s income from its comparison shopping service in Europe.

Apart from the fine, the Commission has ordered Google to “stop its illegal conduct” and anti-competitive practices within the 90 days deadline.  If it does not end its current conduct, the EU says the company faces a further penalty of up to 5% of the average daily turnover of the Alphabet, Google’s parent company.”

“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,” said Commissioner Margrethe Vestager, in charge of competition policy.


Google shopping manipulation

So, as part of this decision, Google will now have to change its search ranking algorithm, in order to “comply with the simple principle of giving equal treatment to rival comparison shopping services and its own service.”

However, Google may appeal this decision in EU courts, potentially delaying a final resolution for years. In a statement, the company 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.”

The US tech giant currently faces two other ongoing EU antitrust investigations: one targeting its AdSense business, and another, the deals it makes with Android phone manufacturers – Google’s alleged offer of unfair deals to Android phone makers to promote its own apps and services by preinstalling them on cell phones.

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