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Google faces record €3bn fine for anti-competitive practices, abusing dominance

After a six-year dispute, the European Commission is close to imposing a fine of around €3bn – half of what it could actually bring to bear

Google faces a record European Commission fine of around €3bn for anti-competitive business practices, reported The Telegraph.

Although European Commission (EC) authorities are still finalising the case, the fine is expected to be announced within weeks, the paper said, citing sources close to the situation.

The EC started an investigation into Google’s business practices in November 2010, notifying the company in March 2013 of concerns that the US firm had abused its dominance of the search market. Google reportedly accounts for 90% of the European Union (EU) search market.

Since then, there have been numerous attempts on both sides to reach a voluntary settlement in the case, with Google promising in October 2013 to make a series of concessions to allay EC concerns. Google declined to comment on the current development, according to the UK media outlet.

However, towards the end of 2015, the search giant did argue that its users still had choice. Amit Singhal, then senior vice-president at Google Search, said at the time: “You typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating, or dominated by one player, yet that is exactly what is happening.” 

In May 2014, the case appeared to be drawing to a close when former EU competition commissioner Joaquin Almunia said Google had agreed to make changes to encourage greater competition.

However, the proposed changes were fiercely opposed by Google’s competitors, including Microsoft, which claimed they were not far-reaching enough.

Over to you, Vestager

Almunia failed to reach a resolution before stepping down in October 2014, when the case was taken over by his successor Margrethe Vestager.

While €3bn ($3.4bn) is nearly three times greater than the EC’s biggest anti-competitive fine to date – the €1.06bn imposed on chip maker Intel in 2009 – it is just over half the maximum of $6.6bn, or 10%, of Google’s worldwide global annual turnover.

The original EC investigation centred on charges that Google had unlawfully promoted its own price comparison service in general search results over those of smaller rivals.

However, in April 2016, the EC claimed Google was in also in breach of EU anti-trust rules by imposing restrictions on Android device manufacturers and mobile network operators as part of its mobile strategy to preserve and strengthen its dominance in general internet search.

The EC said pre-installing and setting Google as the default, or exclusive, search service on most Android devices sold in Europe closed off ways for rival search engines to access the market, via competing mobile browsers and operating systems (OS).

And as recently as early May 2016, EC competition authorities raised the possibility of further charges in other specialised web search markets, such as travel information and maps, according to The Telegraph.

The final fine may also take into consideration Google’s supposed delaying tactics during the EC’s investigation and the changes it made in that time that made it even harder for competitors to thrive, the paper said, citing legal sources.

In addition to the fine, Google is expected to be banned from manipulating search results to favour its services over competitors, but could appeal against both in the European Court of Justice.

Read more about Google’s anti-trust case

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