The European Commission (the “Commission”) has fined Google €2.42 billion, the largest EU fine imposed on a company for infringing EU competition law. The Commission considers that Google abused its dominant position as a search engine by promoting its own comparison shopping service in its search results, and demoting those of its rivals.
In its decision, the Commission concludes that Google is dominant in general internet search markets throughout the EEA. This is based on a number of factors including market shares of over 90% in most EEA states and high barriers to entry due to network effects. Having a dominant position is not illegal under EU competition law, however dominant companies are considered to have a special responsibility not to abuse their dominant position by restricting competition. The Commission considers that Google abused its dominant position by giving its own comparison shopping service an advantage. This meant that Google’s comparison shopping service appeared more prominently in search results, with rivals appearing far lower in search results. The Commission has determined that this had a significant impact on competition, allowing Google’s comparison shopping service to make significant gains in traffic to the detriment of rivals.
This is the latest development in a very long-running investigation by the Commission, which began in 2010 and involved three rounds of negotiations regarding commitments. However, this is not the end of the matter as Google is likely to appeal the Commission’s decision to the General Court of the European Union and damages claims can also be expected to follow. Meanwhile the Commission’s other investigations into Google are still ongoing, including one relating to the Android operating system and another relating to Google’s search advertising platform AdSense.