Google fined 2.42 billion by the European Commission

27 June 2017

The European Commission has fined Google €2.42 billion for breaking EU antitrust rules. Under these rules, dominant companies have a responsibility not to abuse their powerful market positions by restricting competition. Commissioner Margrethe Vestager said that Google “abused its market dominance as a search engine by promoting its own comparison shopping service and demoting those of competitors”.

It was found that since 2008, Google has implemented a strategy which involved pushing its comparison shopping service and demoting the results of rivals, which on average resulted in search results from competitors appearing on page four of Google’s search results. It was said that the ten highest search results generally receive approximately 95% of clicks, meaning that Google was given a significant advantage compared to its rivals. Since Google implemented this strategy, it has been found that traffic to rival comparison shopping services in the UK dropped by as much as 85%.

The Commission decision requires Google to stop its conduct within 90 days. This means that Google will have to give equal treatment to rival comparison shopping services and its own service. If it fails to do so, it could face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company. The Commission has indicated that it will monitor Google’s compliance closely and that Google will be obliged to keep it informed of its actions.

The maximum fine that can be imposed on companies is fixed at 10% of the undertaking’s total turnover in the preceding business year by Article 23(2) of Council Regulation No 1/2003. Given that the fine imposed is said to be only 3% of Google’s turnover, it may be considered by some that it got off lightly. However, the decision may have further financial implications, as it could open the door to civil claims for damages by any person or business affected by its anti-competitive behaviour. Under section 47A of the Competition Act 1998, a person who has suffered loss or damage by virtue of a relevant infringement of EU or UK competition law is entitled to bring a claim for damages or other relief. A relevant infringement for these purposes includes cases such as this one, where there has been a European Commission finding that Article 102 of the Treaty on the Functioning of the European Union has been infringed.

Unsurprisingly, it has been reported that Google is reviewing the European Commission decision carefully and is considering whether to lodge an appeal. 

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