Linked by Thom Holwerda on Tue 27th Jun 2017 10:03 UTC
Legal

The European Commission has fined Google €2.42 billion for breaching EU antitrust rules. Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service.

The company must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.

The two core offences as noted by the European Comission are as follows:

From 2008, Google began to implement in European markets a fundamental change in strategy to push its comparison shopping service. This strategy relied on Google's dominance in general internet search, instead of competition on the merits in comparison shopping markets:

  • Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google's comparison shopping service wants to show results, these are displayed at or near the top of the search results.
  • Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google's search results on the basis of Google's generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. Evidence shows that even the most highly ranked rival service appears on average only on page four of Google's search results, and others appear even further down. Google's own comparison shopping service is not subject to Google's generic search algorithms, including such demotions.

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.

Much like Apple's and Ireland's illegal tax deal, fines like this can be easily avoided: respect the laws regarding doing business in the EU. I don't expect the current (or the previous, for that matter) US administration to keep these incredibly powerful tech giants in check, so I guess it's up to the EU.

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EU is really messed on this
by jonsmirl on Tue 27th Jun 2017 12:12 UTC
jonsmirl
Member since:
2005-07-06

Google shopping is a minor piece of Google. Personally I never use it. I doubt that Google has anywhere near 2.42EUR revenue from this product and certainly not 2.42EUR in profits from it. It is really messed up when the fine can take all of your profits from an area plus even more on top of that.

I suspect if Google was offered the deal to simply drop the Google shopping product in exchange for dropping the suit, I believe they'd just get rid of the product.

On top of this the complaint misses the mark, the dangerous, potential monopolies are from Amazon and Alibaba, not Google shopping.

Reply Score: 6

RE: EU is really messed on this
by avgalen on Tue 27th Jun 2017 15:11 in reply to "EU is really messed on this"
avgalen Member since:
2010-09-23

It is really messed up when the fine can take all of your profits from an area plus even more on top of that.

No, it would be really messed up if you could do something illegal and walk away from it with a profit.

I suspect if Google was offered the deal to simply drop the Google shopping product in exchange for dropping the suit, I believe they'd just get rid of the product.

You would guess wrong. A long time ago a warning was issued and all Google would have had to do was say sorry and change its behavior. A US agency (FTC?) investigated them for a similar issue but dropped the complaint. The EU has a bit more teeth and is a bit more protective of both competition and consumers

On top of this the complaint misses the mark, the dangerous, potential monopolies are from Amazon and Alibaba, not Google shopping.
The monopoly complaint is not about Google shopping but about Google search abusing it's monopoly to promote Google shopping.

Quick anticompetitive summary: Having a monopoly is fine, but using that monopoly to get ahead in another area is abuse.

Reply Parent Score: 6

RE: EU is really messed on this
by BHermans on Thu 29th Jun 2017 20:59 in reply to "EU is really messed on this"
BHermans Member since:
2016-07-26

Your understanding of EU competition law is quite poor.

If indeed the fine would be so badly off target as you claim, first of all the EU Commission services would never have imposed it because they CAN do basic math and secondly, Google would immediately appeal to the (EU)Court (of First Instance) which it probably will do on the merits anyway.

The fine the commission can impose for an infringement of EU competition law is capped to 10% of yearly turn-over.

Moreover, until such time as the US gets rid of the ridiculous system of "punitive damages" which as a rule far outstrip compensatory damages for damages actually incurred, no US citizen is in a position to comment on EU competition law enforcement.

The only reason why these fines are so high for American companies is because your competition authorities are ineffective, have total disregard for companies building dominant positions as long as it benefits the consumer whilst EU competition law tries to safeguard the market mechanism by itself because in the end when you end up with a dominant player, quasi monopoly or even oligopoly, this undermines the very foundations of the "free market". Most Americans have forgotten that capitalism has to be kept in check for the fundamental market mechanism to continue to function and maintain competition within the market so as to ensure the best pricing and products for consumers. The alternative is behemoths like Facebook which will impose whatever conditions it wants on you unless you decide not to use its service.

Reply Parent Score: 1