Google-EU Antitrust Case: Search Giant Expected To Be Hit With Record Fine

Google faces a record-setting antitrust fine from the European Union as early as Tuesday for favoring its own shopping search service over smaller competitors, Bloomberg reported.

The fine expected to be handed to Google later this week likely will top a previous record of $1.2 billion. The ruling is expected be rubber-stamped by EU commissioners and handed down by EU Competition Commissioner Margrethe Vestager, bypassing the typical requirement for EU decisions to be considered at a weekly meeting by all 28 commissioners.

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The fine is the result of a seven-year inquiry into Google’s practices, sparked by complaints from a number of competing retailers including News Corp., Axel Springer SE and Microsoft.

At the center of the issue is how Google displays search results for products. Smaller price comparison websites argue Google has harmed their businesses by prominently displaying results that have purchased placement — complete with photos and prices of the product — ahead of the results provided by competitors, which are often just standard links with no images or other frills.

Google often has failed to display alternative sites high enough in the search results to allow those services to generate any advertising revenue. Users, the complaints claim, rarely make it beyond the sponsored results that offer preferential placement to those who will pay for it when searching for products.

Google is expected to receive a penalty larger than the previous record fine handed out by the EU. That came in 2008 when the regulatory body hit Intel with a $1.2 billion fine for what the EU deemed anticompetitive practices designed to keep primary rival AMD from selling its chipsets to computer manufacturers like Dell, Hewlett-Packard and Lenovo.

Intel challenged the fine handed down by the EU, and the case is expected to be resolved within the next year.

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Despite the seven year lead time on the Google antitrust matter, the push for action has accelerated recently. The EU had been targeting July to hand down a decision but pushed up the expected date to this week. Google reportedly has not yet been informed of any pending action — a courtesy the EU typically provides in the lead up to a decision.

Bloomberg reported Google said it has continued to engage in constructive conversations with the EU and believes "strongly that our innovations in online shopping have been good for shoppers, retailers and competition."

Google has held the case brought against it lacks evidence. In a blog post published last year, Kent Walker, Google senior vice president and general counsel, called the EU’s charges “wrong as a matter of fact, law and economics.”

It is unclear exactly how far the EU’s decision will go at this point. While a hefty fine is expected, the commission also has the ability to make — or at least try to make — Google change its practices. Should it choose to, the EU could push for Google to change the way it displays search results.