And it has happened. The European Union has slapped Google with a massive, $2.7 Billion fine over antitrust violations. This is one of the biggest fines ever awarded by the European Union to a company, and comes in response to Google allegedly providing preferential treatment to its own search results. Apart from the financial setback, this could also have other repercussions for the company as other companies may want to emulate EU’s example.
So here is the thing: The EU believes that Google’s shopping tools are violating EU’s fair competition law in a couple of ways. First off, Google provides prominent placement to its own shopping service in the form of “sponsored” results which are plaecd right near the top of the search page.
Click on one of these results and you are taken straight to Google Shopping. And whenever you purchase something, Google makes money. And of course, it might be in your interest to buy the same thing from someplace else. But due to Google’s convoluted search policy, you are redirected to the page where it wants you to go.
The EU also believes that various other shopping comparison services are being demoted in search results to give Google an advantage. And considering that its shopping ads are not subject to search algorithms, it already has an unfair advantage.
Meanwhile, Google has continued drawing attention to the growth of portals like Ebay and Amazon as defense. The company also said that Google Shopping items are clearly marked as “sponsored.” Nevertheless, the EU has decided and Google will now find itself shelling out the money. Considering that Google’s 2016 revenue was almost $90 billion, the fine will not cripple it like it would any other company. However, it is still very significant.
The company now has three months to pay out the money, and then make suitable changes in its modus operandi so as to prevent further fines in the future. It will also have to put forward its suggestions to the EU, which will ratify them before Google can apply them. Of course, the company still has the option to appeal the decision, so we will have to see if it chooses to take that path.
A bibliophile and a business enthusiast.