EU fines Google a record 2.42 billion euros

  • EU fines Google a record 2.42 billion euros

EU fines Google a record 2.42 billion euros

After a seven-year legal battle, European authorities came down hard on Google on Tuesday for taking advantage of its dominance in online searches to direct customers to its own businesses, fining the tech giant a record 2.42 billion euros ($2.72 billion) and raising the prospect of more.

The action came after a seven-year long investigation prompted by scores of complaints from rivals such as USA consumer review website Yelp, TripAdvisor, UK price comparison site Foundem, News Corp and lobbying group FairSearch. "And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation", said Commissioner Margrethe Vestager, who is in charge of competition policy.

When anyone searches to buy something using Google, the first few results show shops which have paid for advertising.

"We respectfully disagree with the conclusions announced today", a Google spokesperson said.

Google has the right to appeal the decision.

It could have fined Google as much as 10% of its annual sales, or roughly $9 billion.

While an European Union record, the amount is below the maximum possible of about 8.0 billion euros or 10 percent of Google's total revenue a year ago. While acknowledging that Google's strategy included a plan to make its shopping product better than anyone else's, she said that the way the company treated its rivals and "systematically" ranked its own service at or near the top of the rankings went beyond the normal scope of competition. "U.S. lawmakers and regulatory authorities, by contrast, have been "asleep at the switch" for far too long".

Shares in Alphabet dropped by 1.2% in premarket trading.

The fine broke the previous European Union record for a monopoly case against USA chipmaker Intel of 1.06 billion euros. Intel has been fighting to overturn that decision ever since.

To avoid more pain in Europe, Google will have to change the way it does business in the region.

The EU has accused the Silicon Valley titan of abusing its market position by imposing restrictions on Android device manufacturers and mobile network operators.

Last summer, she ordered Apple to pay €13 billion in back taxes in Ireland.

Facebook was fined by antitrust regulators in May for misleading officials over its takeover of messaging service WhatsApp.

Vestager rejected any suggestion of anti-American bias, telling reporters on Tuesday that an analysis of investigations her department has launched found that USA companies were not being disproportionately targeted.