Google is fined by the European Commission for anticompetitive conduct

The European Commission fined Google in about €2.42 billion for infringing EU antitrust rules. The Commission has deemed abusive the company’s conduct of using its dominant position in the market, through the online price comparison service, to obtain advantage considered illegal regarding the products and services advertised on Google Shopping, restricting the competitors’ ability to compete. The assessment is based on an investigation of Google’s conduct started in 2008, according to which the company has dominated 90% of the online shopping market in most countries of the European Economic Area – EEA.

The European Commission justified that there would be no problem in a company becoming dominant by merit, but that this is not the case with Google, because the company has given prominent placement to partner advertisers, in the search result on price comparison.

The products of Google Shopping are displayed at the top of the search results or sometimes in a placeholder on the right side of the screen and with imagistic appeal. They are also placed above the results of generic search algorithms, while its competitors are subject to generic search algorithms and possible downgrades.

Evidence proved that even the most highly classified competitor appears only on the fourth page of Google search results, and the others appear further down. In practice, this means that consumers rarely see the Google’s competitors in search results. Moreover, this practice was systematically repeated in each EEA country in which Google Shopping operated, creating a significant impact on competition in the markets of online shopping in Europe.

The European Commission argued that the appearance in Google search results has impact on users’ clicks, because, as demonstrated by surveys, consumers generally click on the results at the top of the first search page or next to them, and the first result of page 2 receives around 1% of all clicks. The investigation concluded that the top ten advertised products and services receive about 95% of the clicks for online surveys.

Since the start of the practice in each country, access to Google Shopping advertisers have increased significantly while competitors suffered a decrease in search traffic. Even not being the only source of traffic for online shopping comparison, due to the dominance of Google as a search engine, it has a majority position in this market.

These practices have deprived European consumers of the benefits of competition on the merits, that is, of making choices in a truly competitive market.

According to the decision of the European Commission, Google shall stop their illegal practices of abuse of dominant position in the market within 90 days and respect the principle of equal treatment in their search results for their advertisers compared to competitors, applying to either the same processes and methods of algorithm in inquiries of generic search.

Azevedo Sette Advogados