Google Shopping, Target of EU Ire, Trails Ecommerce Rivals

Huge fine over Google’s promotion of shopping engine

Author: Cliff Annicelli

June 27, 2017

The European Commission fined Google €2.42 billion ($2.68 billion) for favoring Google Shopping in its search results.

The EC found that Google has “systematically given prominent placement to its own comparison shopping” service with default positioning at or near the top of search results, while demoting other comparison shopping services in results based on its generic search algorithms.

Google introduced this practice in all 13 European Economic Area (EEA) countries where it has rolled out its comparison shopping service, starting in January 2008 in Germany and the UK, according to the ruling.

Google’s search advantage hasn’t translated into a market dominating performance, though. Unique visitor figures from comScore show Google Shopping ranked sixth in the UK and fourth in Germany among retail sites as of February 2017.

Google Shopping ranked similarly in Italy, France, the Netherlands and Spain as of that month, according to comScore. It was the only comparison shopping site on any of those countries’ lists of top ecommerce players.

On the other hand, Google’s dominance of the search market in Europe is categorical. According to data from StatCounter, Google’s share of search referrals in 2016 was above 93% in four of the EU-5 countries. Only in the UK did it fall below that level, coming in at a 90.3% share.

The EC’s ruling declares that Google must end its current practice and “refrain from any measure that has the same or an equivalent object or effect” within 90 days, or face additional penalties of up to 5% of the average daily worldwide revenues of its parent company, Alphabet. The decision also orders Google to comply with the principle of giving equal treatment to rival comparison shopping services as it does to its own service.

In a statement, company senior vice president and general counsel Kent Walker said: “Given the evidence, we respectfully disagree with the conclusions announced today. We will review the commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.”

If the EC’s decision is upheld, fallout from it could continue from other quarters. Any person or business affected by Google's alleged anti-competitive behavior will be able to seek damages under the EU's Antitrust Damages Directive in the courts of EU member states.