EU fines Google record $2.7 billion in first antitrust case
EU antitrust regulators hit Alphabet unit Google with a record
2.42-billion-euro ($2.7 billion) fine on Tuesday, taking a tough line in the
first of three investigations into the company's dominance in searches and
smartphones.
It is the biggest fine the EU has ever imposed on a single company in an
antitrust case, exceeding a 1.06-billion-euro sanction handed down to U.S.
chipmaker Intel in 2009.
The European Commission said the world's most popular internet search engine
has 90 days to stop favouring its own shopping service or face a further penalty
per day of up to 5 percent of Alphabet's average daily global turnover.
The fine, equivalent to 3 percent of Alphabet's turnover, is the biggest
regulatory setback for Google, which settled with U.S. enforcers in 2013 without
a penalty after agreeing to change some of its search practices.
The EU competition enforcer has also charged Google with using its Android
mobile operating system to crush rivals, a case that could potentially be the
most damaging for the company, with the system used in most smartphones.
The company has also been accused of blocking rivals in online search
advertising.
The Commission found that Google, with a market share in searches of over 90
percent in most European countries, had systematically given prominent placement
in searches to its own comparison shopping service and demoted those of rivals
in search results.
"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," European Competition Commissioner Margrethe
Vestager said in a statement.
Google said its data showed people preferred links taking them directly to
products they want and not to websites where they have to repeat their
search.
"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," Kent Walker, Google's general counsel,
said in a statement.
The action follows a seven-year investigation prompted by scores of
complaints from rivals such as U.S. consumer review website Yelp, TripAdvisor,
UK price comparison site Foundem, News Corp and lobbying group FairSearch.
The penalty payment for failure to comply would amount to around $12 million
a day based on Alphabet's 2016 turnover of $90.3 billion. The Commission did not
specify what changes Google had to make.
"This decision is a game-changer. The Commission confirmed that consumers do
not see what is most relevant for them on the world’s most used search engine
but rather what is best for Google," said Monique Goyens, director general of EU
consumer group BEUC.
Thomas Vinje, legal counsel to FairSearch, welcomed the Commission's findings
and urged it to act on Google's Android mobile operating system following its
2013 complaint that Google restricted competition in software running on mobile
devices.
Source: Reuters
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