Google Fined $2.7 Billion for Rigging Search Results
Google has been fined $2.7 billion for unfairly favoring its own shopping services in search results. It's also got 90 days to stop the practice.
The decision comes from the European Commission, the body that oversees competition law in 28 European countries. At the end of an investigation that started back in 2010, it now says Google did breach antitrust rules.
The case relates to shopping comparison services, which let users see prices from multiple retailers. When people search Google for a particular product, the list of results will often include links to the relevant pages on such comparison services.
The Commission decided that when Google included comparison services in its results, it "abused its market dominance" by giving an unfair priority to its own Google Shopping at the expense of rivals, something it considered "an illegal advantage." (Source: europa.eu)
Google Penalized Rivals, Promoted Self
According to the investigation, this worked in two ways. One was that Google Shopping was given an intentional boost to appear at the top of the results, even if it didn't "deserve" to be there under Google's normal search ranking system.
The other was that Google's ranking algorithm had a deliberate penalty for comparison sites, pushing them down the rankings; however, it appears that Google Shopping was exempt from this penalty.
Both the ruling and the size of the fine take into account Google's stature. European competition rules often hold a company to a higher standard over anti-competitive behavior if they dominate a market, the theory being that this makes the negative effects on potential competitors much more severe.
Google Says Ruling Flawed
Google says it must "respectively disagree" with the ruling and is considering an appeal. It says the Commission didn't take into account that Google Shopping links take a customer directly to price comparisons for a specific product, while if customers follow a link to many other comparison sites, they need to type the product details in again. According to Google, this makes Google Shopping more useful and relevant and thus its appropriate to appear higher in the rankings.
Google also rejected the Commission's argument that rival comparison services having a fall in visitor numbers was proof they were hurt by the rankings. According to Google this might instead be explained by more users going direct to sites such as Amazon or eBay when searching for products, rather than using search engines. (Source: blog.google)
What's Your Opinion?
Do you agree with the decision? Is the size of the fine appropriate? Should search engines be allowed to decide rankings however they like, and should any rules be different depending on how dominant they are?
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Comments
Rigged results
Two things come to mind when reading this article:
1. How can the results be "rigged" if Google is the one that is providing the service? If Google owns the service, Google should be able to do whatever it wants. If you don't like it, then go find another advertising service.
2. Where does the $2.7 billion dollars go after they are fined? Straight into the lawyer's pockets? Does it get evenly distributed to all the customers that where "unfairly" advertising their product? I'm thinking it's the former.
Another perverse EU ruling
I think the verdict on this is unnecessarily harsh towards Google. I don't see the EU fining Financial Advisers for recommending their preferred products that pay the best commission or comparison sites like Confused.com who receive commissions from the brands they recommend.
What the EU does not seem to have taken into account is that the vast majority of consumers are happy to use Google search and their other services completely free of charge. These same consumers have a choice of many other search sites to use but Google remains definitively the most used service. This cannot be because they are doing a bad job. I use their search to investigate and find products but I have the ultimate say over which I will purchase regardless of positioning on search results.
As to the question of where the fine goes, I cannot be definitive but the EU has never achieved a successful professional audit of it's accounts due to the number of black holes of missing money.
Ultimately if Google is damaged or restricted by the EU it is their customers and users that will lose out.