After months of waiting in regards to the Google antitrust penalty that was supposed to be closer to $1 billion. However, today the EU leveled a much larger 2.4 billion euro ($2.7 billion) fine against Google for the alleged abuse of its market power in vertical (shopping) search.
We were all expecting a fine, but even then, this seems much higher than expected. In the long standing antitrust saga, Google is now, in the climax, being punished for “favoring its own content” in shopping search results.
The company denied that its practices harm competition or consumers. Rather, Google argued that its results are beneficial and match evolving consumer demands:
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.
A number of years ago, Google made multiple and unsuccessful attempts to settle with the former European Commission competition chief, Joaquin Almunia. But, Margrethe Vestager, his successor, has been much tougher on Google and other US companies. This is the first of three (or possibly more) antitrust cases that Google face that could bring additional billion-dollar fines.
Kent Walker, Google’s General Council, stated in a blog post that Google will study the decision before they choose what they are going to do next. The post was more restrained than past statement and argues the consumer benefits of Google’s approach:
We think our current shopping results are useful and are a much-improved version of the text-only ads we showed a decade ago. Showing ads that include pictures, ratings, and prices benefits us, our advertisers, and most of all, our users. And we show them only when your feedback tells us they are relevant. Thousands of European merchants use these ads to compete with larger companies like Amazon and eBay.
To Google, there’s plenty of competition in the market, pointing o Amazon as its chief shopping search rival.
Alphabet, Google’s parent company has 9- days to formally respond and propose a remedy that will offer “equal treatment” to Google’s shopping competitors in Europe. They have 60 days to notify the European Commission of its plans.
There are those in Europe who’d like to see a third party to supervise Google’s compliance from here on out.
If Google decides not to offer a remedy, it could completely pull shopping search from Europe completely. Google could even seek recourse to European high courts, even though they’ve tended to give deference to the European Commission decisions in the past.