Google to comply with EU demand over search engine

Google has agreed to notify EU regulators on how it plans to ensure its search engine does not favour its own shopping service over those of rivals.

Alphabet’s Google was hit with a record €2.4bn fine from the EU over the practice in June and had until midnight last night to come up with proposals to end the anti-competitive behaviour.

The European Commission said on June 27 that the world’s most popular internet search engine had abused its dominance in Europe to give prominent placements in searches to its own comparison shopping service and demote those of rivals.

The EU gave Google 60 days to propose how it would “stop its illegal content” and 90 days to make changes to how the company displays shopping search results when users start seeking a product.

As well as ordering Google to come up with a solution, the commission said the US company must stop the practice by September 28.

Google said it would communicate its compliance plan to the EU competition enforcer in line with the deadline.

Failure to do so could expose the company to penalty payments of as much as 5% of Alphabet’s average daily worldwide turnover or around $12m (€10m) a day, based on the parent company’s 2016 turnover of $90.3bn.

“It is Google’s sole responsibility to ensure compliance and it is for Google to explain how it intends to do so,” the commission said in a statement.

Lobbying group ICOMP, whose members include Google rivals online mapping services Hot Map and Streetmap, as well as CEPIC (Centre of the Picture Industry) and TradeComet which owns a rival search engine, said regulators should publicise Google’s proposal.

“These affect everyone in the online and mobile worlds, so they must be made public for evaluation,” said ICOMP head Michael Weber.

Google is also under fire from the EU over practices related to its smartphone mobile operating system Android, where it may face a landmark fine by the end of the year, and regarding online search advertising.

The onus is on Google to find a solution that satisfies regulators, who have learned from past battles with Microsoft and Intel. Microsoft’s failure to obey a 2004 competition order and charge reasonable fees for software licences saw it fined €899m four years later.

Google has the option of challenging the fine and the antitrust order to the European courts, which can take years to reach a final decision.

Google would have to comply with the order ahead of any final decision from EU judges.

Reuters and Bloomberg


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