Today, the European General Court upheld a 2017 anti-trust ruling by the European Commission which imposed on Google a fine of $2.8 billion following a finding of anti-competitive conduct by the internet giant
Why the decision against Google is important
Google has lost its appeal against a $2.8 billion fine, which was imposed on it by the EU after the European Commission concluded that it was operating in an anti competitive environment.
This decision against Google is important but not many people fully appreciate its significance.
Whilst Google still has one more opportunity to appeal, the significance of the upholding of the European Commission ruling goes far beyond the financial implication for Google. The $2.8 billion that Google has to pay in fines, might be pocket money for the internet giant but the case could open up other avenues of anti-competitive investigations, not only by the EU, but by also by the US Federal Trade Commission and by the Australian Competition and Consumer Commission.
The importance of the finding by the EU court against Google anti competitive practices cannot be overlooked. On this occasion, Google anti competitive practices had the potential of directly impacting many of the EU large medium and small businesses, as well as its half a billion consumers.
Yair Cohen discusses the latest European Court decision about Google anti-trust practices
Why was Google fined by the European Commission
The latest ruling, relates to Google’s practices of manipulating price comparison searches.
In short, Google made sure that all new Android mobile phones, came with Google Chrome as a default browser.
It then made sure that all Google Chrome browsers came with “Google Search” as the default search engine.
Then Google made sure that when consumers search for a product or a service, for example, for a flight ticket, Google Shopping was the default first search result. Often, no other search results would have been shown from other price comparison websites.
This meant, that Google gave itself a competitive advantage over other price comparison websites and by doing this, it was able to crash any possible competition and deprive consumers of real price comparison.
Without any competition left, Google was able, if it wanted to, to oppress business of all sizes by demanding higher and higher fees for allowing them to be included in search results on Google Shopping.
This could have meant, that a business who was unwilling or unable to pay Google a fee for the privilege of being included in Google Shopping search results, (a fee that is determined solely by Google), would have been risking going out of business altogether.
Those who would have agreed to pay, could eventually have found themselves so heavily squeezed, possibly to the point of financial oppression and bankruptcy.
They would have needed to give Google larger chunks of their already tiny profits margins and at the same time increase prices, just to stay in business.
Why did the European Commission decide to pursue Google anti-trust conduct
Had Google been allowed to continue with this anti competitive practice, Google could have become a de facto business partner of all the travel agencies, insurance companies, restaurants and hotels in the EU.
Luckily enough, Google got found out and was made to stop this particular anti-trust practice back in 2017. However, Google never accepted defeat and continued to appeal the European Commission’s ruling until today. Google is likely to go for one more line of appeal. After that, it will either be game over for Google anti competitive practices or a real tragedy for EU consumers and business owners.