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EU hits Google with record Sh278 billion fine

By Reuters | Published Wed, June 28th 2017 at 00:00, Updated June 27th 2017 at 23:01 GMT +3
Google headquarters in California, USA. The company has also been accused of blocking rivals in online search advertising. [Courtesy]

European Union (EU) anti-trust regulators yesterday hit Alphabet unit Google with a record 2.42-billion-euro ($2.7 billion - Sh278 billion) fine for breaching anti-trust rules after a seven-year investigation.

It is the biggest fine the EU has ever imposed on a single company in an anti-trust case, exceeding a 1.06-billion-euro sanction handed down to US chipmaker Intel in 2009.

The European Commission said the world’s most popular Internet search engine has 90 days to stop favouring its own shopping service or face a further penalty per day of up to five per cent of Alphabet’s average daily global turnover.

The fine, equivalent to three per cent of Alphabet’s turnover, is the biggest regulatory setback for Google, which settled with US enforcers in 2013 without a penalty after agreeing to change some of its search practices.

The penalty payment for failure to comply would amount to around $12 million (Sh12.3 billion) a day based on Alphabet’s 2016 turnover of $90.3 billion (Sh9.3 trillion). The Commission did not specify what changes Google had to make. The EU competition enforcer has also charged Google with using its Android mobile operating system to crush rivals, a case that could potentially be the most damaging for the company, with the system used in most smartphones. The company has also been accused of blocking rivals in online search advertising.

The Commission found that Google, with a market share in searches of over 90 per cent in most European countries, had systematically given prominent placement in searches to its own comparison shopping service and demoted those of rivals in search results.

“What Google has done is illegal under EU anti-trust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” European Competition Commissioner Margrethe Vestager said in a statement. 

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