Google appeals record EU fine over 'unfair' shopping searches

Online shopping searches are one of Google’s most important sources of sales growth as it takes on rivals like Facebook and Amazon

The fine was the biggest ever handed to a single company in an EU anti-trust case

Google has launched an appeal against a €2.4bn (£2.2bn) fine that the European Commission ordered it to pay in June for breaching anti-trust rules with its online shopping service.

The tech giant has filed the appeal with the General Court of the European Union. Previously it had stated that it “respectfully” disagreed with the Commission’s decision.

In June, Google was slapped with the record-breaking fine for abusing its dominant position in the fiercely competitive and rapidly expanding world of online shopping.

The Commission at the time said that the company had 90 days to end the misconduct. If it did not, the Commission said, it faced penalty payments of up to 5 per cent of the average daily worldwide turnover of Alphabet, which is Google’s parent company. The deadline for making those changes is at the end of this month.

“Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals,” commissioner Margrethe Vestager, who is in charge of competition policy, said when June’s decision was announced.

“Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors,” she said.

Online shopping searches are one of Google’s most important sources of sales growth as it takes on rivals as diverse as Facebook and Amazon.

The company has reportedly been using a type of online advertising known as Product Listing Ads, or PLAs. The format lets a marketer place an ad for an item with large images and price information in the prime digital real estate at the top of search result pages.

The commission said that since 2008, Google has systematically given prominent placement to its own comparison shopping service, while demoting rival comparison shopping services in its search results. Research shows that consumers are much more likely to click on results that are more visible.

Even on a desktop, the commission said, the 10 highest-ranking generic search results on the first visible page together generally receive approximately 95 per cent of all clicks. The top result receives about 35 per cent of all the clicks.

Comparison shopping services rely to a great extent on traffic to be competitive, meaning that Google’s engineering of search results skewed the market unfairly.

The severity of June’s ruling indicated that the EU is cracking down on misconduct. Analysts at the time also said that the move sends an important message of zero tolerance to other players.

It was the biggest fine ever handed to a single company in an EU anti-trust case, beating a nearly €1.1bn penalty that US chipmaker Intel was forced to pay back in 2009.