Google Breaks The Wrong Record For Search Result Manipulation
The recording-setting $2.7 billion (2.4 billion euro) fine received by Google from the European Union could end up only being only a fraction of the total costs from the demand made by the EU to stop skewing its search results so that its own shopping site is favored.
According to NYC SEO experts, although the penalty won’t make much of a dent in Google’s $90 billion, it does face the possibility of receiving lower ad revenues as well as a regulatory backlash that targets other Google services from restaurant reviews to maps in addition to even more penalties being threatened.
The decision made by Margrethe Vestager, who is the antitrust chief of the EU, brings the seven-year investigation to an end, which was fueled by numerous complaints coming from both small shopping sites in addition to larger players, including Microsoft Corp., Axel Springer SE, and News Corp. European politicians had been calling for Google to be sanctioned or for it to be broken up even, while U.S. critics are claiming that successful American firms are being targeted by regulators.
According to the binding order coming from the European Commission, Alphabet Inc.’s Google is being required to stop its illegal conduct and must provide rival price-comparison services with equal treatment. It is up to Google to decide how it will do this and within 60 days it must inform the EU of what its plans are.
A 90-day ultimatum was given by Vestager to Google to find ways of providing smaller price-comparison services with equal treatment. These services are in competition with the Google Shopping ads that are displayed whenever consumers are searching for products. The EU will also be monitoring Google for a five year period and if the company doesn’t comply it can be forced to pay additional fees as high as 5 percent of the search engine’s daily revenues.
Kent Walker, who is Google’s general counsel, says that the Mountain View, California-based company disagrees with the conclusions made by the EU and a court appeal is being considered.
Since 2008, Google has pushed its own comparison-shopping service, and according to the EU has given it prominent placement systematically when consumers search for items. Usually, rival comparison sites only show up on page four and higher in the search results, which effectively denies them a large audience since 95 percent of total clicks are attracted by the first page.
According to the lawyer from a Paris-based firm, Simmons & Simmons, it is fairly normal when a private company has been able to build itself from nothing to favor the company’s own services. However, the decision made by the EU appears to impose similar obligations on Google that would be expected for a former state monopoly like a power or water company to have to follow.
However, the fines handed out on Tuesday could be just the first in an entire series of antitrust penalties imposed on Google by the EU. The search engine giant is fighting on two other fronts at least, including its online advertising AdSense service and its Android mobile phone software. Vestager says she may need to look into Googles restaurant reviews, travel and maps as well since regular have received complaints in those areas also.
This new decision follows on the heels of the $7.8 million antitrust fine from Russia and penalties from French, German and Italian privacy authorities. It has been proven that Europe is a very tough jurisdiction for Google. The company got into trouble with the area’s top court when three years ago it lost a right-to-be-forgotten high-profile case.
Although the penalty is record-breaking, it won’t do much to faze Google, since its parent company has over $90 billion in cash. The more serious concern is how Google has been called upon by regulars to change the way it manages its online shopping searches since it is one of the largest sources of sales growth as well as one of its most powerful weapons against major competitors such as Amazon and Facebook.