Will Record Fine Cramp Google's Style in Europe?

Will Record Fine Cramp Google's Style in Europe? 620 320 C-Suite Network

The European Commission on Tuesday walloped Google unit with a record 2.4 billion euros fine — about US$2.7 billion — for giving its own shopping comparison site preference above smaller competitors, and thus abusing its dominant position as a search engine.

Google must end the conduct within 90 days or face penalties of 5 percent of its average daily global revenue, the EC said.

Commissioner Margrethe Vestager, who is in charge of regulating competition, praised Google for its overall innovation, but said that Google’s actions were not limited to reasonable efforts to put out a better comparison shopping product than its rivals.

“Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results and demoting those of competitors,” she said. “What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate.”

Consumers in the region were denied a genuine choice of services, Vestager added.

Froogle Flop

Google first entered its comparison shopping product in Europe in 2004 under the name “Froogle.” The Froogle service performed poorly, and Google changed its strategy in 2008, according to the EC, when it was renamed “Google Product Search.” It became “Google Shopping” in 2013.

When consumers searched for products starting in 2008, Google gave preference to its own comparison shopping tool in 13 European Economic Area countries, starting in Germany and…