On Tuesday June 27, 2017, Google was hit with a $2.7 Billion antitrust fine by European Union regulators. This is the largest fine issued by the EU for an antitrust case. After a seven-year investigation, Google was charged with favoring its own products on its Google shopping page and for disfavoring its competitors by pushing them farther down the search results.
“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,” said European Competition Commissioner Margrethe Vestager. Google has been given ninety days to correct is shopping services search results or receive additional fines. There are currently two other charges being investigated.
For advertisers in the EU, this could result in the need to develop a new advertising strategy. Advertising on Google is competitive and participants put in a great deal of thought, time and money into building these strategies. Advertisers that currently have a system that is working for them may find it necessary to update or alter their strategy after Google implements the required changes with respect to its products and its rivals’. Google’s rivals, however, should see improvement in their advertising strategies once the mandatory alterations have been implemented.
It is likely that Google will appeal this decision. The current ruling could allow for private litigants to try to obtain damages through their national court. And in light of the two additional charges that are being looked into, Google is unlikely to accept the EU decision without a fight.
Currently, it is unclear what this will mean for those who utilize Google shopping in the US. There have been complaints about Google’s ranking methods from its US rivals in the past. This ruling could be seen as an opportunity for those rivals to make moves into Google’s backyard.
Google has dominated the search engine market for some time now and it is unlikely that this decision will cause consumers to start using another site anytime soon. However, this does not mean that users are willing to just accept search results that are now known to have been tampered with, especially when Google has a personal stake in the rankings.
In summary as stated by the EU regulators, “But Google’s strategy for its comparison shopping service wasn’t just about attracting customers. It wasn’t just about making its product better than its rivals. Google has abused its market dominance in its search engine by promoting its own shopping comparison site in its search results and demoting its competitors.”