Google, fined by the EU with $ 2.4 billion!
In a shocking development, the European Union has levied a fine of €2.42 billion on search engine giant Google, one of the biggest companies in the world, for abusing their market dominance by manipulating its search engine results to favor their own comparison shopping service.
The EU has made a case that Google has been artificially and illegally promoting their price comparison service, which has denied its consumers a real choice and that rival firms were denied the opportunity to compete fairly.
The EU has given Google 90 days to stop what it considers to be an illegal activity, failing which they will be levying fines of €10.6m a day. That amounts to 5 percent of the daily revenue of the search engine giant – a substantial sum indeed.
The EU has also said that Google has abused its position as the provider of services such as maps, images and other information in order to get a higher position on its search engines.
The European Union has also tried to deny accusations that they had a bias against US firms. They said that Google was guilty of an “old school” type of illegality.
The EU official in charge of competition policy, commissioner Margrethe Vestager 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.”
“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 antitrust 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,” Ms. Vestager added.
This follows another case against Google’s Android OS service, where the EU said that Google has “stifled choice and innovation” in of mobile apps by “pursuing an overall strategy on mobile devices to protect and expand its dominant position in general internet search”.
Google has steadfastly denied any such accusations. A spokesman for 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 Google spokesman added.
This reminds one of the anti-trust lawsuits waged against Microsoft in the late 1990s, which almost broke the back of the company. Microsoft somehow survived that episode and is now stronger and bigger than ever.
Author: Raghav Hegde – India