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Google Receives Record Fine

posted by Nino Robertson | 27.06.2017

$2.7 Billion Fine from the European Commission

Google fined $2.7 billion by the European Commission, for abusing its power to favour its own shopping comparison services in search results.

Google has been fined a massive $2.7 billion by the European Commission because it deemed that the company had been taking advantage of its power, by promoting its own shopping comparison services at the top of Internet search results. The European Commission had been investigating the company’s shopping operations since 2010.

Protecting Consumers

Google has now been accused of distorting the market, and the fine they have received is the largest ever fine to be given out by the regulator. Google must now stop what are known as anti-competitive practices within a period of 90 days, otherwise it may face further penalties. The American firm are considering an appeal.

Google’s parent company is called Alphabet. If the company fails to change how the shopping services operate before the three-month deadline, then it could end up paying as much as 5% of its daily earnings from across the world to Alphabet. Google’s current worldwide intake reaches $14m per day, according to their latest figures.

The Commission believes it is helping protect consumers as well as smaller firms better due to the fact that in this day and age Google and Facebook dominate online advertisements- most commonly on mobile phones-.

"For well over a decade, Google's search engine has played a decisive role in determining what most of us read, use and purchase online. Left unchecked, there are few limits to this gatekeeper power.

Although the record-breaking 2.42bn Euro fine is likely to dominate the headlines, the prohibition of Google's immensely harmful search manipulation practices is far more important," said its chief executive Shivaun Raff.

Commission Case Not strong Enough

The tech company have hit back and said that they do not believe that the Commission has a strong case due to the fact that they have failed to provide evidence that shows either consumers or smaller firms have been harmed as a result of Google’s methods.

There is now some skepticism across European cities over what is known as GAFA (Google, Apple, Facebook and Amazon) as these powerful companies play such a prominent role in society, this is expected to heighten tensions between Brussels and Washington as steps will be taken to ensure that all four of these giants powers will be limited. Despite the fact that the fine was a record amount, it could have been more. The commission is well within its rights to fine Alphabet 10% of its annual revenue. Last year that figure was more than $90bn.

Alphabet currently owns $172bn worth of assets.

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