European Commission Slams Google with €2.4bn Fine

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Emma Okonji with agency report

The European Commission (EC) has fined Google €2.42 billion (N866 billion) after ruling that the internet giant abused its market dominance as a search engine by illegally promoting its own shopping comparison service.

Although the EC has ruled over the fine, Google however said it ‘respectfully disagrees’ with the ruling, and is considering an appeal.
The search giant must end the practise within 90 days or face penalty payments of up to 5 per cent of the average daily worldwide turnover of Alphabet, Google’s parent company.

Based on Alphabet’s most recent financial report, this would amount to approximately $14 million per day, according to BBC report.
In a statement, the EC said Google was guilty of breaching European Union (EU) antitrust rules after systematically giving prominent placement to its own shopping comparison service, first launched in 2004, on its search engine.
From 2008, the European watchdog said Google began to implement a fundamental change in strategy to push its comparison shopping service in European markets.

“This strategy relied on Google’s dominance in general internet search, instead of competition on the merits in comparison shopping markets,” read the statement.

Google’s actions also had the effect of demoting rival comparison shopping services in its search results, as the company used generic search algorithms which led to rival services appearing lower in the rankings.
“As a result, Google’s comparison shopping service is much more visible to consumers in Google’s search results, whilst rival comparison shopping services are much less visible,” said the EC.

Commission Margrethe Vestager said Google’s strategy for its comparison shopping service was not just about “attracting customers by making its product better than those of its rivals, it denied other companies the chance to compete on the merits and to innovate.
“And more importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” she said.
The Commission is still investigating Google’s actions related to the Android platform, having come to the preliminary conclusion that a dominant position has been abused.
This is related actions which stifled choice and innovation in mobile apps and services, to protect Google’s own products, Vestager said.

In a blog post, Google’s General Counsel, Kent Walker, however said the company ‘respectfully disagrees’ with the decision, and was considering an appeal.

It also suggested that rivals Amazon and eBay had more influence over user spending habits.
“When you use Google to search for products, we try to give you what you are looking for. Our ability to do that well isn’t favouring ourselves, or any particular site or seller – it’s the result of hard work and constant innovation, based on user feedback,” Walker said.

All over the globe, bigger operators tend to create market dominance over and above smaller operators, thus causing market imbalance. In some regions of the world, the dominant operators even go as far as stifling the operations of smaller operators, with the intention of sending them out of business, a situation that has posed serious concern to global regulators.
In Nigeria for instance, the Nigerian Communications Commission (NCC), the telecoms industry regulator is currently battling with dominant operators, who most times, are involved in sharp practices that are capable to stifling the businesses of the smaller operators.