Google has been hit with a record fine of €2.4bn by Europe's competition watchdog after breaching anti-trust rules with its online shopping service. Here, we look at the reasons behind the fine.
Why has Google been slapped with the fine?
The European Commission launched an investigation centred on whether the firm breached competition rules by skewing search results in its favour, thereby restricting online rivals.
The watchdog concluded the tech giant has abused its market dominance as a search engine by handing an "illegal advantage" to its comparison shopping operation.
It found Google has "systematically" given prominent placement to its own comparison shopping service while demoting rival comparison shopping services in its search results.
The company must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.
What were the effects of Google’s practices?
The Commission argues Google’s practices have had a big impact on competition, allowing it to make "significant gains in traffic" at the expense of its rivals and to the detriment of European consumers.
Since the beginning of each abuse, Google’s comparison shopping service has increased its traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy, the watchdog said.
Following the demotions applied by Google, traffic to rivals has dropped significantly.
The Commission found specific evidence of sudden drops of traffic to certain rival websites of 85% in the UK, up to 92% in Germany and 80% in France.
Is this the first time Google has been in trouble with European authorities?
Alongside competition issues, the company is facing mounting global pressure over its tax affairs amid a backlash against corporate tax avoidance by multi-national companies.
Last year, the US tech giant’s Paris office was raided by French police as part of an investigation into tax fraud and money laundering.
In the UK, Google agreed a controversial £130 million deal with HM Revenue & Customs in January 2016 to settle a 10-year tax inquiry into its UK business.
Google has also been accused by the European Commission of "stifling competition" by abusing the dominant position of its Android operating system.
The antitrust body alleged the technology giant has breached competition rules by preventing consumers from "having as wide a choice as possible".