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EU hits Google with record 2.4 billion euro fine for skewing search results

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ROBERT GALBRAITH (POOL/AFP/Archives)
Google responded that it "respectfully disagrees" with the ruling, and will consider an appeal

The EU slapped Google with a record 2.4-billion-euro anti-trust fine on Tuesday, dealing a fresh blow to a US tech giant and risking the anger of President Donald Trump.

Hard-charging European Commission competition chief Margrethe Vestager said Google had "abused its market dominance" as the world's most popular search engine to give illegal advantage to its own shopping service.

"What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate," Vestager said in a statement.

"And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation."

The fine is the largest penalty handed down by the regulator to date for market distortion, eclipsing the previous EU record for a monopoly case against US chipmaker Intel of 1.06 billion euros. 

Google responded that it "respectfully disagrees" with the ruling, and will consider an appeal.

"We respectfully disagree with the conclusions announced today. We will review the (European) Commission's decision in detail as we consider an appeal, and we look forward to continuing to make our case," Kent Walker, the company's senior vice president and general counsel, said in a statement.

Brussels accuses Google of giving its own online service, Google Shopping, too much priority in search results to the detriment of other price comparison services, such as TripAdvisor and Expedia.

Crucially for Google, Brussels has demanded that the US tech giant change the business model for Google Shopping to meet the EU's concerns.

The ruling requires Google to end anti-competition practices within 90 days or it could be forced to pay, as an additional penalty, 5 percent of its parent company Alphabet's average daily earnings.

Google previously argued that online retailers such as Amazon and eBay hold more influence over online spending habits, and said that the Commission's case "failed to fit the reality of how most people shop online."

The Commission has been investigating Google's alleged favoring of its own products in search results since 2010, after complaints from Microsoft and other competitors.

Commissioner Margrethe Vestager narrowed the focus of the alleged distortion to Google Shopping's comparison tool, a strategy that will apparently set precedent for prohibiting the tech giant from favoring its proprietaries in other domains, including travel, maps and more.

While the penalty is record-setting, the Commission had the potential to strike a harder blow by fining Alphabet up to 10% of its annual revenue, which was recorded at more than $90 billion in its last fiscal year.

Alphabet currently has more than $172 billion in total assets.

(Staff with AFP)

Comments

(2)
StopThisMadness

The Eu can't stand that they STILL have no internet giants invented in all of Europe. LoL Tiny little Israel kicks all of the EU's butt at tech companies.

Was monopoly the reason?

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