European Union regulators slapped Google with a record €2.4
billion ($2.7 billion) antitrust fine on Tuesday, the latest broadside fired at
big American tech companies doing business in the region.
The European Commission found that the U.S. tech giant
denied “consumers a genuine choice” by using its search engine to unfairly
steer them to its own shopping platform.
Regulators said that Google must change its behavior within
90 days or face additional penalties.
“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.”
Google (GOOGL, Tech30) said in a statement that it tries to
show ads in ways that are helpful for buyers and sellers.
“We respectfully disagree with the conclusions announced
today,” a Google spokesperson said. “We will review the Commission’s decision
in detail as we consider an appeal, and we look forward to continuing to make
our case.”
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.
It could have fined Google as much as 10% of its annual
sales, or roughly $9 billion.
Shares in Google parent company 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 (INTC, Tech30) in 2009.
Intel has been fighting to overturn that decision ever since.
Google’s regulatory headache in Europe doesn’t end with the
online shopping case, which dates back to 2010.
The EU has also accused the Silicon Valley titan of abusing
its market position by imposing restrictions on Android device manufacturers
and mobile network operators.
It is also investigating the company’s ad placing service,
AdSense.
Related: Nike is the next U.S. company in Europe’s
crosshairs
American firms have come under increased scrutiny in Europe
on issues related to tax and competition.
Apple (AAPL, Tech30) is fighting a European demand that it
repay €13 billion ($14.7 billion) in back taxes to the Irish government.
Facebook (FB, Tech30) was fined by antitrust regulators in
May for misleading officials over its takeover of messaging service WhatsApp.
The same month, Amazon (AMZN, Tech30) agreed to change its distribution
agreements with e-book publishers to address antitrust concerns raised by the
Commission.
And in early June, antitrust officials launched
investigations into claims that Nike (NKE) may have broken EU laws by
restricting how traders can sell licensed merchandise. Comcast’s (CCV)
Universal Studios is being investigated on the same grounds.
The SUN
