Google slapped with record fine over online shopping service

Google has been fined a record €2.42 billion (£2.1 billion) after being caught abusing its power and promoting its own shopping comparison service at the top of search results. This is the largest penalty of its kind against a company accused of distorting the market and orders that Google end the practice within 90 days or it could be forced to make payments of 5 per cent of parent company Alphabet’s average daily worldwide earnings.

The fine comes as a result of a probe by the Eurpean Commission that had been investigating Google Shopping since late 2010 and had been encouraged by rivals such as Microsoft, though such firms have declined to comment on the fine. 

However, speaking to the BBC, Richard Stables, chief executive of comparison site Kelkoo, said: "An entire industry has suffered because of Google’s unlawful, anticompetitive behaviour, and it has become a genuine struggle for survival for the likes of [us]. At the same time, Google’s abuse has raised costs for merchants, and it has meant higher prices for consumers and much more limited choice."

The system works by identifying that a user may be searching for a product and then presenting images of the it, along with names of shops it’s available for and review scores. The search results are flagged as ‘sponsored’, meaning that they have been paid for. The main problem stems from the fact that these sponsored results dominate the content presented to users, particularly on smartphones where these ads take over the majority of the ‘above-the-fold’ content. 

The Commission has told Google that it needs to change in order to give a more even level of representation to different sellers, and not just focus on sponsored content. This decision should come as a relief to online retailers who will have found their products buried on Google. The drastic change to the Google Shopping should present a potential boost to online sales.

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