Google suffered a major blow on Tuesday after European antitrust officials fined the search giant a record $2.7 billion for unfairly favoring some of its own services over those of rivals.

The penalty, of 2.4 billion euros, highlights the aggressive stance that European officials have taken in regulating many of the world’s largest technology companies, going significantly further than their American counterparts.

“What Google has done is illegal under EU antitrust rules,” said Margrethe Vestager, the bloc’s top antitrust official. “It 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.”

The Commission said that Google acted illegally by giving priority placement in search results to its own shopping service, while relegating results from rivals to areas where potential buyers were much less likely to click.

Google Shopping box is displayed above other results.

It could have fined Google as much as 10% of its annual sales, or roughly $9 billion.
The $2.7 billion fine represents just over 2.5% of Google’s revenue last year and Alphabet, Google’s owner, had $92.4 billion in cash as of end of March.

Shares in Alphabet dropped by 1.2% in premarket trading.

Tuesday’s fine dwarfs the previous EU record antitrust penalty of €1.06 billion ($1.2 billion) imposed on Intel in 2009. Intel has been fighting to overturn that decision ever since.

The record-breaking fine seems likely to further erode already tense relationships between American tech giants and the European regulators. Last year, Apple was hit with a record €13 billion (£11.3 billion) tax bill after the commission, led by Vestager, ruled its tax arrangements in Ireland amounted to “state aid.” (Both Apple and Ireland challenge this.) This rocky relationship stretches back a decade, with the landmark antitrust case against Microsoft in the 2000s.

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Biplab Ghosh

Biplab lives his life around technology and is particularly keen to explore the intersection of technology and human behaviour. Always looking for new ideas, and ways that can make things simpler. He is a geek with the flair for travel and has great passion for music and theatres.

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