It’s been several months since we heard anything about the antitrust regulations in Europe and the case they had against Google for “abuse of market position” in shopping search, which is one of three active cases against the company. Now, it seems that Europe is ready to fine Google. Reuters reported the news based on discussions with “two people familiar with the matter.”
According to the article, the fine will likely be imposed by August and could amount to up to 10 percent of Google’s global revenues, which was roughly $90 billion last year. This means that Alphabet, Google’s parent company, is facing a fine of $9 billion in this one matter.
The fine has been anticipated for some time due to Google’s inability to settle the case with the EU regulators. Several unsuccessful attempts (e.g., “rival links“) were made by the company to settle with former European Commission competition czar Joaquin Almunia. Margrethe Vestager, Almunia’s successor, has been much tougher on Google.
The EU’s formal “Statement of Objections” (antitrust charges) in the case focused on comparison shopping, although there were other areas of search that would possibly be vulnerable to similar claims. Here are some of the verbaim claims that appeared in the Statement of Objections:
- Google systematically positions and prominently displays its comparison shopping service in its general search results pages, irrespective of its merits.
- Google does not apply to its own comparison shopping service the system of penalties which it applies to other comparison shopping services on the basis of defined parameters, and which can lead to the lowering of the rank in which they appear in Google’s general search results pages.
- As a result of Google’s systematic favouring of its subsequent comparison shopping services “Google Product Search” and “Google Shopping”, both experienced higher rates of growth, to the detriment of rival comparison shopping services.
Google did what they could to push back on the EU’s position, asserting that the evolution of its search results pages has been about improving quality and the user experience, which are beneficial to consumers:
Google has always worked to improve its services, creating new ways to provide better answers and show more useful ads. We’ve taken seriously the concerns in the European Commission’s Statement of Objections (SO) that our innovations are anti-competitive. The response we filed today shows why we believe those allegations are incorrect, and why we believe that Google increases choice for European consumers and offers valuable opportunities for businesses of all sizes.
It’s reported by Reuters that the European Commission “will tell Google to stop its alleged anti-competitive practices.” This could possibly mean there would be a change in how shopping search results are presented in the search engine. What could this mean? The implications are unclear. It’s possible that Google could appeal to the European Court of Justice should the penalties be imposed.
The two other active antitrust cases focus on exclusivity provisions in Google AdWords agreements and Android-OEM contracts and carry similar potential exposure for Google.