Google hit with $2.7B fine by EU over search engine results

Google has been slapped with a record-breaking $2.7 billion fine by the European Commission for abusing its dominance of the search engine market in building its online shopping service.

The European Commission said that the search engine has 90 days to end the misconduct. If it does not, it faces penalty payments of up to 5 percent of the average daily worldwide turnover of Alphabet, which is Google’s parent company.

“Google’s strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals,” said Commissioner Margrethe Vestager, who is in charge of competition policy. “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.

"It has denied other companies the chance to compete on their merits and to innovate, and most importantly it has denied European consumers the benefits of competition, genuine choice and innovation," Vestager added.

The penalty is the biggest ever competition fine from the European Commission, doubling the previous record handed to Intel in 2009. The commission’s decision, following a seven-year investigation into Google’s dominance in searches and smartphones, suggests the company may need to fundamentally rethink the way it operates. It is also now liable to face civil actions for damages by any person or business affected by its anti-competitive behaviour.

Google has consistently denied any wrongdoing and this ruling will deal a sharp blow to the group, especially because online shopping searches are one of the company’s most important sources of sales growth. It immediately rejected the commission’s findings, and said it will consider appealing the decision to the highest court in Europe, the European Court of Justice, in an indication of the gruelling legal battle to come between the two sides.