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Google Fined Over 2 Billion Euros

By piranha

7th July 2017

Google has been fined a record sum of €2.4bn (£2.14bn) by the European Union.

Investigators accuse the company of abusing its market dominance by manipulating search engine results to favour its own shopping pages. European regulators said that by doing so, Google ‘denied both its consumers real choice and rival firms the ability to compete on a level playing field.’

However, Google has completely refuted these claims, a spokesperson stating that ‘we respectfully disagree with the conclusions announced today’ and signalling an intention to appeal against the decision.

How Long Has This Been Happening?

European investors allege that this illegal activity has been occurring almost constantly since 2004. Google was examining failures at the time in its price comparison service – then named Froogle – which resulted in a reshuffle.

Commissioner Margrethe Vestager, Brussels’ official in charge of competition policy, said that it was then that Google’s reshuffled algorithms began to push its own services up in an artificial and illegal manner.

What Form Will the Fine Take?

Google has 90 days from the issue of the order to stop all illegal activity and reform its policies. Failure to do so will result in an EU fine set at up to €10.6m per day.

Although this is an astronomical sum of money, The Guardian’s Daniel Boffey points out that €10.6m is only 10% of the daily turnover of Google’s parent company, Alphabet Inc.

Will Google Care?

10% of daily turnover, though considerable, might not seem like a huge hit for Google to take. However, it is highly likely that the brand’s image will suffer from this setback. Even if the search engine stops all illegal activity and avoids the fine, customer confidence is sure to be affected.

Large tech companies including Apple and Facebook have also had to overcome customer trust issues in recent months. Allegations range from tax avoidance to shady takeovers.

Good News for Consumers

The EU’s clampdown on the illegal activity of tech giants can only be good news for consumers. Fair competition between advertisers should keep prices at reasonable rates and give people real choice when shopping online.

The hefty fine of €2.4bn is a crack in Google’s monopoly of online search and will likely cause a major internal shake-up. This giant among giants in Silicon Valley has already begun to alter its shopping algorithms.

We’ll have to wait to see the long-term outcomes for SEO and online advertising.

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