Tuesday, 27 June 2017 20:03

EU fines Google US$2.7b for alleged abuse of search dominance Featured

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The European Commission has hit Google with a fine of €2.42 billion (US$2.7 billion) for allegedly abusing its search engine dominance to give illegal advantage to its own comparison shopping service.

The fine was announced in Brussels this evening Australian time.

The company was told that it must end this behaviour within 90 days or face penalty payments of up to 5% of the daily worldwide turnover of Alphabet, its parent company.

Commissioner Margrethe Vestager, who is in charge of EU 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."

google eu

She added: "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 anti-trust 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."

A statement said: "Google's illegal practices have had a significant impact on competition between Google's own comparison shopping service and rival services.

"They allowed Google's comparison shopping service to make significant gains in traffic at the expense of its rivals and to the detriment of European consumers."

The EC has two other investigations going on, one into Google's Android mobile operating system and the other into its Adsense advertising service. In both cases, the EC has made a prelimimary determination that Google has again abused its dominant position.

In a blog post, Google’s lawyer Kent Walker said the company did not agree with the EC’s conclusions and would consider a court appeal.

"When you shop online, you want to find the products you’re looking for quickly and easily,” he said. “And advertisers want to promote those same products. That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.

"We think our current shopping results are useful and are a much-improved version of the text-only ads we showed a decade ago."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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