€2.42bn Google’s Record Fine from the EU

What are the ramifications for other comparison providers?

For the second time in recent years, the EU yet hammered Google with a large and contentious fine. This time, for an anti-trust breach, after it found the search giant had promoted products on it’s own comparison site over those of others within search.

As merely the search portion of a much bigger organisation, Alphabet. Last year, Google was subject to a number of raids in countries such as France, in a multi-billion tax investigation.

Alphabet, was created as a place to freely innovate. Including within it Google, smart home provider Nest, X Lab and other subsidiaries, it provided a shielded way to experiment and provide users with new and novel experiences, including better comparisons. In this particular case, Google’s search engine gave an unfair advantage to Google’s comparison shopping service, which has been in the “shopping” tab of Google search for 13 years.

Recent reports of the ruling were naturally oversimplified, since Alphabet, Google’s parent holding company, was technically in breach of giving one of Google’s sibling organisations an unfair advantage. The European Union found on two main points:

• The major dominance of Google as a search engine meant that it was a natural monopoly
• Google’s self-promotion on its own platform took advantage of its position in that monopoly.

This is quite an interesting result, but has major ramifications for other companies occupying the same space, including Amazon’s recommendations over sellers who use its platform.

Business is Business

There is a wider question of whether or not the EU should have hit Google for carrying out, what is in essence, standard business activity. After all, a business will promote its own things but crucially, Google wasn’t promoting its own products. The products belonged to other businesses. Yet, the dominance of Google’s search inherently reduced the efficacy of other comparison services and with this, resulted in an alleged disadvantage to the competition.

The decision leaves Google vulnerable. Services providing search that themselves linked to Google and arguably even suppliers solely using other services could have been adversely impacted. Those with a legitimate case, now have the option of civil litigation.

Investigation at Scale & Wider Impacts

The scale of the investigation was impressive and certainly couldn’t have been regarded as anything but thorough. European investigators trawled through 1.7 billion search queries totaling 5.2 terabytes of data, financial records and traces. Statistically, this is way more than enough to prove definitively if Google did tamper with queries and thus present, their comparison service first.

They found what they regarded as a systemic attempt to disadvantage competitors. If you are working in the same space as competitors and they rely or use your services, then you have an automatic declared interest and in Google’s rules, this placed it in a position of exhibiting quite considerable anti-competitive behaviour. Yet, this is certainly not the first time we’ve seen this. BT itself is in the very same position, offering the biggest wholesale broadband service, which competitors use to deliver their services (e.g Sky, Talk-Talk), but also themselves delivering broadband services. Ofcom have already formally ordered BT Open reach be split completely from BT, after continual failures by BT to address the issues surrounding both its alleged anti-competitive behaviour and it’s contonual place at the top of Ofcom’s worst performing broadband provider list for customer complaints.

Google certainly is not the only service to provide such a comparison and do so from a position of a relative monopoly. Amazon similarly has a monopoly on comparisons and recommendations of books, eBay comparisons and recommendations of products. Will these two other big players find themselves in the frame? Only time will tell.

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