EU to Fine Google €3 Billion for Unfair Competition Practices

Google antitrust

In the upcoming weeks, Google is set to face a record breaking fine for unfair competition practices. This news comes on the back of the end of a seven year investigation into the practices of Google by officials of the European Commission in Brussels, who are now preparing the final touches to a fine that would amount to approximately €3bn.

The last time a fine was levied on a company for similar monopolistic practices that hindered competition and growth, Intel had to dish out close to €1.1bn. Although this might not be the last of fines that would be levied on Google, officials are now ready to finalise the details as early as next month as they push for the end of the 7 year long legal battle.

Google’s main offence as detailed by the fine is that it altered the general search results and manipulated them to promote their own price comparison services over those of smaller competitors. This denied those competitors the site traffic they should receive and as a result of that they made grave losses. The maximum penalty Google could have faced was €6.6bn or 10% of their total annual sales.

Google troubles and worries though have just begun as their Android smartphone software comes under similar fire of unfair competition via monopolistic domination in the market.

Margarethe Vestager, the Competition Commissioner, has, as of Friday, raised the possibility of Googe facing further charges in other specialised web search markets such as travel information and maps.

Apart from the fine, Google will also be required to immediately cease the manipulation of its search algorithm such that it favours the company over other rivals. In a bid to placate such accusations and to avoid manipulating the algorithm, Google has time and again offered to redesign the presentation of results. Unfortunately though, this and Google’s reasoning of eBay and Amazon giving it fair competition online seem to have been rejected by the European Commission.

This rejection could set precedence for other companies to be cautious of the regulations in the European Union. Even with the option of recourse through the European Court of Justice, the current decision will cause long-term implications for companies that try to abuse their monopoly.

[Via The Telegraph]