EU Hits Google With Massive $2.7 Billion Fine

(CN) – The European Commission Tuesday slapped Google with a $2.7 billion  fine for breaching their antitrust rules. The Commission said its action was the result of a lengthy investigation, and  that the tech giant abused its market dominance by favoring its shopping service in searches.

For its part, Google said Tuesday it “respectfully” disagrees with the  Commission’s findings and is considering an appeal. It has 90 days before the penalties have to be paid.

The Commission saysthat Google has systematically favored its comparison services over those of its rivals and that the Google Shopping service, previously called Froogle and Google Product Search, was more visible than rival services, which were demoted in its rankings.

“What Google has done is illegal under EU antitrust rules,” said Commissioner Margrethe Vestager in a statement. “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.”

In a statement of its own, Google said, “When you shop online, you want to find the products you’re looking for quickly and easily 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 respectfully disagree with the conclusions announced today. We will review the Commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case,” the company said.

In a blog post, Kent Walker, a Google senior vice president and its general counsel, expanded on the company’s position:

“When you shop online, you want to find the products you’re looking for quickly and easily. And advertisers want to promote those same products,” Walker wrote. “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 believe the European Commission’s online shopping decision underestimates the value of those kinds of fast and easy connections,” he continued. “While some comparison shopping sites naturally want Google to show them more prominently, our data show that people usually prefer links that take them directly to the products they want, not to websites where they have to repeat their searches.”

Walker said Google believes its 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,” he said.

 

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