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
Sure, it could just be that Google was better at it, but I kind of doubt that. They are definitely not gods who automagically makes better stuff than anyone else but they certinaly is in a position to push that tale and strongarm anyone they compete against ... because their most basic sercice is the tool that takes people to those products. It is most defintiely a conflict of interest, and we only have a slogan ("Don't be evil") to trust them by.
Honestly I'd love for Google to prove they don't abuse their power in court.
Edit: @HopelesslyFaithful This applies to your post too, parts of it anyway.
One can say a fiber optic cable connecting two networks is a road. Or some program connecting websites or something. Google does nothing with being a search engine that acts as a connection blocking people.
Your argument is 100% baseless because it is factually wrong.
No one forces you to use google. Not using google does not prevent you from doing anything on the internet. Not using google just means you dont use their services that are independent of the rest of the internet.
No where are you required to use google to find a website or connect to a website. You can use any of 50 plus different search engines or type the url directly.
Your argument is devoid of everything except being patently false.
I don't care how many times you say a road it doesn't make google a connection that blocks you from doing something. Google is not a required portal or connection or fiber cable.
You are in no way required to you google to access anything on the internet.
A monoply also requires no alternatives. Microsoft can be considered a monoply since OSX and linux blow since they dont support 99% of all programs ever made.
Just because everyone uses google because ti is better or they are lazy doesnt make it a monoply...again a patently false assertion.
You can use bing, yahoo, ask jeeves, duck duck go, or any of the other 10s or 100s of search engines that still exist and will probably always exist.
www.reliablesoft.net/top-10-search-engines-in-the-world/
en.wikipedia.org/wiki/List_of_search_engines
^^^
plenty of options and their will always be options. If google purposely booggered their search engine to hawk their stuff people would leave and use a better one.
www.theatlantic.com/photo/2014/12/bhopal-the-worlds-worst-industrial-disaster-30-years-later/100864
Compare this to the 1000x payout BP had to contend with over an oil spill, with a ton of fake claimants they had to pay, obviously human lives cost far less!
thehill.com/policy/energy-environment/318375-bp-pushes-back-at-gulf-oil-spill-settlement
Don't like it, don't use it.... but wait... I need to use windows because all corporations use windows, and windows has all the best programs, etc.... so Windows becomes a monopoly by the choice of consumers and corporations... and it becomes so popular that no one buys other competing products... then it becomes MS's problem, and then they have to do what others tell them to do with their product... This makes no sense to me.
The same can be said for Android. 5+ years ago android was nothing. Over time, as android became more popular, people became tied to Google's apps (Play store, Gmail, etc). Eventually Google put requirements on OEMs if they wanted to bundle Google's services with their phones. No one was forcing them to install Google's services, and they could just create their own app store, or install their own competing apps. But people who have invested time and money into Googles services want it, so they need it. So they either need to agree with Googles terms, or take a hike. Some have tried to sue, claiming anti-competitive practices... But it seems pretty fair to have requirements to use someones service. That pretty much applies to most things in life.
Europeans from my experience have a direct and emotional bond with their ruling government. They may bitch and complain about one party or another but, in the end the only "G-d" they worship is their own bureaucracy and what it can do for them. This is why they are ok with gun control and heavy individual regulation. Things that are very taboo in the US. Is this wrong? Nope. Its their nation and how they choose to run it. It works for them and I fully understand why they get defensive toward Americans who criticize it. I respect the decision.
Americans for the most part are the polar opposite. We have a direct and emotional distrust with our government. We also bitch and complain about parties but, at the end of the day we distrust both deeply and always assume the worst. Our "G-d" is individualism. All Americans think they are special and not part a collective. We have had a civil war just because we disagreed with a regulation (right or wrong). We feel absolute power breeds absolute corruption. When a European talks gun control they are thinking of the lives it will save. When you hear an American talking gun control you hear how the government needs to be afraid of the common man and that we would rather live in a "dangerous" free society than a tyranny. This is a deep fundamental difference between cultures and IMO both are somewhat right in a given circumstance. There is no such thing as a "one shoe, fits all" when it comes to cultural norms. Every circumstance is different.
Does Google deserve the fine? Europeans say yes because they trust the government. Americans say no because they distrust the government. Which is right? Honestly IMO its probably somewhere in the middle.
I've always wondered how this right came to be? Some of the arguments advocating self defense are fine but to take on a well trained & fully equipped army, can't see 2A being a justification for that?
I am split on this ruling though. Truth probably is somewhere in the middle.
It used to be, "you pay, your ad comes first (without being listed as an ad), and people think your company is the most popular search result." What Google did since the suit was filed to act more properly, and less like an Organized Crime Syndicate, doesn't matter, as it doesn't change what they did before and what the EU charged them with.
With all that being said people like you said the same exact thing when the US took on the Viet Cong. See how that turned out don't ya? The government wants to disarm Americans to not save them from themselves but, to control them.
But I digress.
Anyway, a compromise in this context would probably be a court where technical proof has to be presented. That is something americans seem to understand very well. :p But then people would have to poke around in Googles algorithms and that they will fight.
What EU can do is make it impossible for Google to maintain their European entities - which Google uses to pay lower taxes.
The numbers make sense. EU fined them 2.4bln EUR, but Google saves more thanks to their tax strategy for European branch.
And since it is unlikely that Google will change the way they provide search results (that's how they make those billions) you know what will happen? EU will fine them regularly - always as much as they find possible to get most of the lost tax back, but at the same time not make this totally unprofitable for Google (because we want their HQ in EU).And this is exactly what you don't understand. They can't do that. Being a private company doesn't give them right to do whatever they want (not outside US, anyway ;-)).
They offer a search engine that should give you an accurate and complete information. EU (or a local government) could find it inappropriate if they censored results based on some private matters: e.g. Google owners don't like melons, so Google never lists them when you search for fruits. We might call this funny, but that's how things work in a regulated environment.
But since Google is actually censoring competing products, EU has a clear and obvious case.Because that's not what "a search engine" is about.
Analogy: imagine you're a physician and you have a private medical practice, but you also own a pharmacological company (directly or through shares).
Do you think you should be allowed to prescribe drugs that your company makes over competition?
Of course lets assume drugs from different companies have exactly the same ingredients and the same impact on health (which is usually true).If you're operating a search engine, you're not forced to help competing search engines. :)That's not a valid argument outside forum discussions. In particular, it doesn't work in courts. :)
Google doesn't inform you that they censor the results - that's the point.
Anti-Trust only exists if there is no other option to choose, which is not the case for a search engine and google does nothing to prevent you from using a competitor.
If google used google fiber and blocked bing and pricegrabber to google fiber subscribers that would be inherently anti-trust.
The above case is baseless and has no grounds.
Just because EU court is corrupt or retarded does not make reality or facts irrelevant....holy fracking crap man.
The amount of pure intellectual dishonesty you just spewed is news website disqus forum level!
If you're doing a house renovation and the company you employed turns out to be very bad (they don't know how to mix concrete), is the "no one forced you to choose them" still valid?
No. You choose them because they are a building company. You assume they know how to do stuff. You can sue them if they f..up.
This is exactly what google case is about: assumption. A user assumes that this is a search engine - that it will provide him the most relevant results. Google even reserves the right to analyze my Internet usage, my e-mails and so forth - all to give me results that will fit my profile the most.They won't. Even if they pay those 2.4bln, they'll still save a lot on EU-specific tax strategy.
Your analogy is wrong and irrelevant (again)
Your analogy proves you have other options
Your analogy doesn't prove that google is not a choice.
It proves it is a choice
It does not show how google caused you any damage for you to be able sue google. Please file a lawsuit against google for "damages" let us see how far that goes ROFLCOPTER (hint you have no damages and why you would be laughed out of court)
Not directed at you unless you were the one that said it on the last page:
Someone else claimed earlier this fine will recoup lost taxes..which is the definition of tyranny. Using false crimes to get money. If there was lost taxes they would be fined for tax fraud.
The void of actual honesty and intellect in this thread is appalling.
Remember the environment here is very different to US.
Companies rarely win cases against the state. Tax legislation is very precise (we can easily say: way too complex).
Also I doubt this would be a good PR move for Google.
If they'd won such a case against a government agency in US, Americans would celebrate. A private company (just how many times did you mention that?) beats the state. They keep the money they made - that how it should be!
In a similar situation in Europe they would be widely criticized by media and citizens. Yes! The people would take the side of the state.
IMO it's not worth it. They might lower the fine during negotiations, but will have to pay eventually. The actual issue here is: what to do next? Will they change how Google Search works? (doubtful) Will they put a huge banner on top saying "we're promoting our products"?
And whenever you think that EU regulations are stupid and US-based companies will simply ignore it, just think about the Cookie Law. :-)