EU hits Google with a record antitrust fine of $2.7 billion

* The EU slaps Google with 2.4 billion euro ($2.7
billion) fine over antitrust abuses.
* The fine is the largest to be doled out by EU regulators.
* Google will have the opportunity to appeal to the European Court
of Justice.

EU regulators fined Google a record 2.4 billion euros ($2.7
billion) Tuesday, ruling that the search-engine giant violated
antitrust rules for its online shopping practices.

The fine is the largest doled out by Brussels for a monopoly
abuse case and follows a seven-year-long investigation.

“Google has abused its dominance as a search engine by giving
illegal advantages to another Google product, its shopping
comparison service,” Commissioner Margrethe Vestager told
reporters.

Investigations were triggered after the European Commission
received dozens of complaints from U.S. and European competitors
who claimed that the company abused its search market dominance to
give its Google Shopping service an advantage over other retailers
and create a monopoly over consumers.

Though the company was charged with distorting internet results
by the EU competition authority in April 2015 it has not before
faced fines for an abuse of this nature and marks a landmark for
the way technology companies are regulated.

The business has been given 90 days to cease these practices or
face further penalties. This may include noncompliance payments of
up to 5 percent of Google parent Alphabet’s daily worldwide
turnover.

Google will consider appealing

Google said it will consider appealing the decision to the
highest court in Europe, the European Court of Justice, which will
be its final hope of undoing the charges.

EU regulatory guidelines stipulate that such fines are capped at
up to 10 percent of the company’s global turnover. As part of
Alphabet, Google could have been slapped with a charge of up to $9
billion based on its 2016 turnover. While the final bill fell short
of this, it eclipses the 1 billion euro ($1.45 billion) fine doled
out to chipmaker Intel in 2009. It is also higher than estimates
cited by sources in the lead-up to the verdict.

Alphabet’s share price dropped 1 percent on the announcement in
premarket trading Tuesday.

Regulators are continuing to investigate two other charges,
including whether the Android mobile operating system is being used
to promote other Google products at an unfair disadvantage to
rivals.

The ruling may also open the way for private litigants to seek
compensation for damages at national courts.

“EU antitrust rules apply to all companies that operate in
Europe’s Economic Area, no matter where they’re based,” Vestager
said. “The purpose is to ensure competition and innovation for the
benefit of European consumers. Google has come up with many
innovative products, and many innovative services, that have made a
difference in our lives — and that’s a good thing.”

“But Google’s strategy for its comparison shopping service
wasn’t just about attracting customers. It wasn’t just about making
its product better than its rivals. Google has abused its market
dominance in its search engine by promoting its own shopping
comparison site in its search results and demoting its
competitors.”

Google, which makes most of its money from advertising, has
argued that the European Commission’s theory “just doesn’t fit the
reality of how most people shop online.”

“They reach merchant websites in many different ways: via
general search engines, specialist search services, merchant
platforms, social media sites, and online ads served by various
companies,” Kent Walker, Google’s general counsel, said in a blog
post.

“And of course, merchants are reaching consumers directly like
never before. On the mobile web — and more than half of Europe’s
Internet traffic is mobile these days — dedicated apps are the most
common way for consumers to shop.”

cnbc

* The EU slaps Google with 2.4 billion euro ($2.7
billion) fine over antitrust abuses.
* The fine is the largest to be doled out by EU regulators.
* Google will have the opportunity to appeal to the European Court
of Justice.

EU regulators fined Google a record 2.4 billion euros ($2.7
billion) Tuesday, ruling that the search-engine giant violated
antitrust rules for its online shopping practices.

The fine is the largest doled out by Brussels for a monopoly
abuse case and follows a seven-year-long investigation.

“Google has abused its dominance as a search engine by giving
illegal advantages to another Google product, its shopping
comparison service,” Commissioner Margrethe Vestager told
reporters.

Investigations were triggered after the European Commission
received dozens of complaints from U.S. and European competitors
who claimed that the company abused its search market dominance to
give its Google Shopping service an advantage over other retailers
and create a monopoly over consumers.

Though the company was charged with distorting internet results
by the EU competition authority in April 2015 it has not before
faced fines for an abuse of this nature and marks a landmark for
the way technology companies are regulated.

The business has been given 90 days to cease these practices or
face further penalties. This may include noncompliance payments of
up to 5 percent of Google parent Alphabet’s daily worldwide
turnover.

Google will consider appealing

Google said it will consider appealing the decision to the
highest court in Europe, the European Court of Justice, which will
be its final hope of undoing the charges.

EU regulatory guidelines stipulate that such fines are capped at
up to 10 percent of the company’s global turnover. As part of
Alphabet, Google could have been slapped with a charge of up to $9
billion based on its 2016 turnover. While the final bill fell short
of this, it eclipses the 1 billion euro ($1.45 billion) fine doled
out to chipmaker Intel in 2009. It is also higher than estimates
cited by sources in the lead-up to the verdict.

Alphabet’s share price dropped 1 percent on the announcement in
premarket trading Tuesday.

Regulators are continuing to investigate two other charges,
including whether the Android mobile operating system is being used
to promote other Google products at an unfair disadvantage to
rivals.

The ruling may also open the way for private litigants to seek
compensation for damages at national courts.

“EU antitrust rules apply to all companies that operate in
Europe’s Economic Area, no matter where they’re based,” Vestager
said. “The purpose is to ensure competition and innovation for the
benefit of European consumers. Google has come up with many
innovative products, and many innovative services, that have made a
difference in our lives — and that’s a good thing.”

“But Google’s strategy for its comparison shopping service
wasn’t just about attracting customers. It wasn’t just about making
its product better than its rivals. Google has abused its market
dominance in its search engine by promoting its own shopping
comparison site in its search results and demoting its
competitors.”

Google, which makes most of its money from advertising, has
argued that the European Commission’s theory “just doesn’t fit the
reality of how most people shop online.”

“They reach merchant websites in many different ways: via
general search engines, specialist search services, merchant
platforms, social media sites, and online ads served by various
companies,” Kent Walker, Google’s general counsel, said in a blog
post.

“And of course, merchants are reaching consumers directly like
never before. On the mobile web — and more than half of Europe’s
Internet traffic is mobile these days — dedicated apps are the most
common way for consumers to shop.”

cnbc