Google Hit with $2.7 Billion Antitrust Fine by EU Regulators

Fine Imposed on Google

On Tuesday, June 27th, European Union regulators fined Google approximately $2.7 billion (2.4 billion euro) for violation of the EU’s antitrust laws.

Violation of Antitrust Law

It was found that Google was denying “consumers a genuine choice” through using the Google search engine to unfairly direct customers to Google’s own comparison shopping platform. The European Commission found that as a result of this conduct, Google had “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.”

In the EU, it is a violation of the antitrust law for a company to abuse its dominant position in a particular market. Although market dominance itself is not illegal in the EU, companies in a dominant market position have a special duty to not abuse that position. In this case, the European Commission found that Google had abused its dominant position in the search engine market to achieve a competitive advantage in the comparison shopping market through demoting competitor comparison shopping services in its search results.

As such, the Commission found that Google had abused its dominant position in the search engine market by leveraging that position to unfairly gain a competitive advantage in the related market of online comparison shopping services.

Impact on Market and Consumers

As a result of Google’s conduct, the Commission found that Google made substantial market share gains in the shopping comparison market to the expense of its competitors which in turn harmed European consumers.

Following Googles’ demotions of competitor shopping comparison services in its search engine, some of Google’s competitors saw significant decreases in traffic that could not be explained by other factors.

This evidence, together with other evidence tending to show the impact of Google’s demotions of competitors on consumers decisions, led the Commission to conclude that Google’s conduct had effectively stifled competition on the merits thereby depriving consumers of the benefits of genuine choice and innovation.

Changes Resulting from the Decision

The primary change that will flow from this decision, if maintained, is that Google would be required to have its search engine treat competitors in the comparison shopping service equally with its own service in that industry.

Thus, Google will be required to use the same process and method for returning rival comparison shopping services in its results page as it does for its own comparison shopping service.

Google's Potential Appeal and Future Litigation

Google is considering an appeal of the decision. Litigation on this matter is likely far from over as Google is also likely to face civil actions brought in courts of the Member states by individuals or companies that were adversely affected by Google’s anti-competitive conduct.

Conclusion

Google has been fined $2.7 billion by European Union regulators for violating antitrust laws. The European Commission found that Google abused its dominant position in the search engine market to gain a competitive advantage in the comparison shopping market. This conduct denied consumers a genuine choice and harmed competitors. 

As a result of the decision, Google will be required to treat competitors in the comparison shopping service equally with its own service. Google may appeal the decision and could face civil actions in courts of the Member states.