The European Union made clear on Monday that it intends to levy fines on Google Inc. large enough to act as a deterrent to other monopolies as punishment for squeezing out rivals in the comparison shopping market.
The EU’s competition commission (EC) told the search giant that it could face a fine based on its AdWords revenue attributed to European users, according to the EC statement of objections released to Google. The EU will also dictate to Google how its shopping services are displayed on the search engine going forward.
The EC “intends to set the fine at a level which will be sufficient to ensure deterrence,” the document reads. It further “considers that, based on the facts described in this statement of objections, Google committed the infringement intentionally or, at the very least, negligently.”
Google took a dim view of the EC’s complaint, which eventually led to the patience of the European regulator running out after three settlement bids were rejected by Google. Rival companies complained that Google unfairly promotes its own services and paid ads over direct competitors. The EU began their probe in 2010.
Microsoft Corp., Expedia Inc., and other web publishers asked the EU to examine complaints that Google favors its own services over competitors and interferes with specialized search engines that compete with it.
According to the full version of the document the EC sent to Google in April, fines could be based on a variety of factors, including clicks for which google was paid, the number of search queries it handle or the number of searches conducted for which competitor sites should have been displayed.
A fine is certain at this point, as the report said the EC has reached the “preliminary conclusion that Google’s practice of positioning and displaying more favorably, in its general search result pages, its own comparison shopping service compared to competing comparison shipping services constitutes an abuse by Google in the relevant markets for general search services.”
The big question is: How much will the fine be?
Given Microsoft paid billions for similar transgressions, you can imagine Google will be paying somewhere north of that.
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