Google have been hit with the largest fine the European Commission has ever imposed. It has been deemed that Google has abused its power to promote their own paid ads within Google search results.
What has happened?
The EU fine was £2.1bn, but it could have been £70.8bn (10% of annual revenue)!
If Google Shopping is not changed within 90 days, it could be facing a fine of 5% to its entire parent company’s ‘Alphabet’ average daily worldwide income.
Alphabet, the parent company of Google, current have in excess of $172bn of assets. The fine is not a concern to them, but the future strategies of Google will be a primary concern for the company.
Google have promoted paid shopping ads, making them more visually appealing and dominating their high positions within the search results for paid customers. The more a user pays for a shopping ad, the more visibility the ad gets in the search results (amongst other more complex algorithms).
For the past seven years the European Commission has been investigating Google Shopping.
The complaints are said to be raised by Microsoft and other companies.
Quotes taken from the BBC News:
“An entire industry has suffered because of Google’s unlawful, anticompetitive behaviour, and it has become a genuine struggle for survival for the likes of [us],” the chief executive of Kelkoo Richard Stables told the BBC.
“At the same time, Google’s abuse has raised costs for merchants, and it has meant higher prices for consumers and much more limited choice.”
“What Google has done is illegal under EU antitrust rules,” declared Margrethe Vestager, the European Union’s Competition Commissioner.
“It has denied other companies the chance to compete on their merits and to innovate, and most importantly it has denied European consumers the benefits of competition, genuine choice and innovation.”
What could this mean going forward?
The EU Civil Service could look at how Google gives precedence to Google maps, flight price results and most importantly, the way local business listings are displayed within the search results when using Google.
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