Tuesday, June 27th 2017
European Commission Fines Google in €2.42 billion for Antitrust Violations
Another year, another European Commission fine for an antitrust violation. This time, the target of the fine is none other than Google. In what could be the most important antitrust ruling in recent years (which overshadows even Microsoft's 2004 browser fine), the EC has found that Google has systematically worked towards increasing prominence in search results to those displayed by the company's own comparison shopping service, dubbed "Google Shopping". "Google Shopping" started in 2004, when Google entered the comparison shopping market in Europe, with a product that was initially called "Froogle", renamed "Google Product Search" in 2008 and since 2013 has been called "Google Shopping".
However, it would seem that Froogle wasn't all that successful. When Google entered the comparison shopping markets with Froogle, there were already a number of established players, which dampened the company's market foray. The EC states that Google was aware that Froogle's market performance was relatively poor, pointing to one internal document from 2006 that stated, quite plainly, that "Froogle simply doesn't work".
By increasing prominence of its own "Google Shopping" results in detriment of its competitors, the EC has arrived to the conclusion that Google managed to "increase its [Google Shopping] traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy." At the same time, the EC states that "(...) traffic to rival comparison shopping services (...) dropped significantly. For example, the Commission found specific evidence of sudden drops of traffic to certain rival websites of 85% in the United Kingdom, up to 92% in Germany and 80% in France. These sudden drops could also not be explained by other factors." The EC further states that should Google not desist on its erroneous, illegal, censored conduct within 90 days, the company would face additional penalty payments of "up to 5% of the average daily worldwide turnover of Alphabet." To put things into perspective, Alphabet's full-year revenue in 2016 stood close to $90 billion. Check the source links for the complete rundown and announcement of the EC.
Commissioner Margrethe Vestager, in charge of competition policy, said: "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."
Sources:
European Comission Press Release Database, Statista
However, it would seem that Froogle wasn't all that successful. When Google entered the comparison shopping markets with Froogle, there were already a number of established players, which dampened the company's market foray. The EC states that Google was aware that Froogle's market performance was relatively poor, pointing to one internal document from 2006 that stated, quite plainly, that "Froogle simply doesn't work".
Commissioner Margrethe Vestager, in charge of competition policy, said: "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."
70 Comments on European Commission Fines Google in €2.42 billion for Antitrust Violations
Waiting patiently for the money grab from the eu to blow up in their faces.
Yes, yes, it's all just a giant cash grab by the EU. Of course.
Just because corporations are above the law in the US doesn't mean that the same is true in the EU.
11 years ago froogle worked better (i compared the 2 or 3 searches for a month and never used anything else than froogle after the comparison) and was more convenient and the "anti-competitive" practice listed sounds more like a god damn convince. Are tey claiming the fact that when you do a product search it goes:
google
price watchers
price grabber
in the search engine listing as anti competitive? Good Lord.I agree. I would love for google to not pay and ignore the fee and watch the EU try to block google services.
I've never used Google shopping as the main local alternative is so much better, but ... Google manipulating any search result is bad. I don't see how that is hard to understand, and I absolutely do not understand why people are lenient to Google in this case, and only this case. There are many reasons to be wary of them - and those reasons comes up in any Google related discussion - , but they are above this somehow? I don't understand people.
I don't agree with the judgement and I agree with @cdawall that if I use Google by choice, why would I not expect to get Google shopping results.
But leave out the shite people.
The reason they're getting fined isn't because they show google shopping results on their search engine, it's because they're intentionally demoting any kind of search result that competes with their own shopping ones.
Under EU monopoly rules it's illegal for them to abuse their search engine monopoly (they have >95% of the EU search engine market) to promote their services in other markets at the detriment of competitors.
(Yes, I just said Steam is a monopoly. No, I don't know why people seem to worship Steam and think they can do no wrong. Microsoft gets flak all the time yet Steam can get away with the same stuff. It's like Steam has a PR cult or something to spin their stuff.)
Again I'm not going on Microsoft's web page expecting to find information to buy Linux distros.
That being said I don't care that Microsoft includes ie or edge or whatever or their own anti-virus. That doesn't make them a monopoly that means other companies need to work harder and stop expecting handouts from the government.
Why do you think they all have their european headquarters in ireland?
Therefore its just fair that they get fined by other ways for their capitalistic robbery.
I wouldn't expect anything less from Google. If I owned a search engine, why wouldn't I sponsor other crap I own? I'm not forcing anybody to use hatsearch, they can go to yahoo and see a bunch of crap yahoo owns, or go to bing and see a bunch of crap microsoft owns. Why would I help a competitor?
Google is a search engine first all other products are after that. So if I search price comparison websites it must show me the most searched ones, or the most viewed ones and not its own first. People need to differentiate product lines.Its not because they are the biggest search engine its because they have to be impartial as a search engine and not hide better results for what people search.People using Google expect neutrality and impartiality.Steam a monopoly? How do you figure? Ever heard of Origin?
Developers choose to use steam. I see no Monopoly. It is the most reliable digital distribution service....Actually Google has the requirements to show you the best results it can find not the ones they are interested in, hence, the lawsuit...
When Microsoft included Internet Explorer in the Windows before 10, a lot on services only ran on Internet Explorer. It meant an Operating System was not allowing you to use the programs you wanted.Its not a problem of sponsoring things. its a problems of burring better results for your searches to promote their other products. And Google has a Commitment to give you the best results they find.
And this is after an ad for not Google. So what Neutrality issue are you seeing?