Why the EU Commission is fining Google billions
The European Commission has imposed its largest antitrust fine to date: Internet giant Google is required to pay 2.42 billion euros for discriminating against competitors in its product search results.
EU Competition Commissioner Margrethe Vestager has imposed a record fine in the years-long competition proceedings surrounding Google's shopping search. Google is keeping its options open to take legal action against the fine of 2.42 billion euros. An overview of the case in questions and answers:
What is "Google Shopping"?
These are the product advertisements with photos, prices and links to retailers that are displayed above or next to the actual hits in an Internet search.
Where does the EU Commission see the problem?
Only ads that retailers have placed as advertising on Google are displayed here. Google earns money when users click on the links. The Commission came to the conclusion that Google was unfairly favoring its own service and at the same time distorting competition with rival product search engines. EU Competition Commissioner Margrethe Vestager complained that their hits only appear later in the search results - where users usually do not even see them, even if it might be the better deal.
What does the EU Commission want to enforce?
Vestager is calling for Google to treat its own shopping service and competing product search engines equally. The ultimate aim is therefore for the company to open up valuable screen space to rivals. Google was already prepared to do this years ago in return for payment - but was rebuffed by competitors and the EU Commission.
What are Google's counterarguments?
The internet company is initially bothered by the fact that the Commission has confirmed that it has a dominant market position - which is the only reason why it is forced to offer its competitors a level playing field. People often start their search for products directly on trading platforms such as Amazon or eBay or come to online stores via social networks or advertisements, the company argues.
What happens now?
The Commission has set Google a deadline of 90 days to change its approach. Otherwise, Google's parent company Alphabet faces a further fine of five percent of its daily turnover - a good 12 million dollars per day.
What could Google do?
The internet company is considering taking legal action against the decision. Regardless of this, Google must first change the display of Shopping ads in Europe. One alternative would be to stop Shopping searches in this country altogether - Google did this with its news portal in Spain following court rulings. Theoretically, Google could also revert the ad formats to their pre-2008 state - only then would the Commission object to the procedure.
How heavy is the billion-euro fine on Google?
Even 2.42 billion euros is easy for the internet company to shoulder - its current cash reserves alone are over 90 billion dollars. But the consequences of the decision are much more far-reaching: Google will have to change its business model, competitors can claim damages in court and Competition Commissioner Vestager emphasized that the Commission will assume that the group has a dominant market position in future. This makes further tough cuts more likely. Google also fears that the EU's tough approach will set a precedent on other continents. Even in Google's home market in the USA, there are critics who accuse the company of abusing its dominant position. (Andrei Sokolov/DPA/SDA)
