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Google hit with $2.7 Billion Fine by EU

Google fined $2.7 Billion by EU commission

     
10:03 am on Jun 27, 2017 (gmt 0)

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Looks like Google has been hit with a 2.4 Billion Euro / $2.7 Billion fine over its shopping venture.

[bbc.com...]

Given 90 days to end the practice of face further fines. Not good for Google.

Regards...jmcc
10:18 am on June 27, 2017 (gmt 0)

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Here's a link to the full statement by the European Commission.


Commissioner Margrethe Vestager, in charge of competition policy, said: "Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. 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.

[europa.eu...]
10:26 am on June 27, 2017 (gmt 0)

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Quite an indictment from the EUC. It will upset a lot of Google supporters. Wonder if Google will, as expected, appeal this fine?

Regards...jmcc
10:31 am on June 27, 2017 (gmt 0)

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European regulators gave the tech giant 90 days to stop its illegal activities or face fines of up to 5% of the average daily worldwide turnover of parent company Alphabet.


lol
10:42 am on June 27, 2017 (gmt 0)

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Google's response [blog.google...]
10:50 am on June 27, 2017 (gmt 0)

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Remember the last time Google tried to respond with a blog post from Amit Singhal? It seems to have learned its lesson and got an actual lawyer to draft the response this time around.

Regards...jmcc
11:13 am on June 27, 2017 (gmt 0)

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The line
"We think it's helpful for our customers" doesn't wash. M$ was being "helpful" when they bundled IE.

Probably, Google will need to add in other options for price comparisons, and leave it to the user. I have no idea how they would implement an API to allow keyword-based document scoring to dynamically serve 3rd party price comparison data.

Very interesting that they name Amazon as their main competitor in this area.

RE: 5% of worldwide turnover of parent company. I'm sceptical that is legal. Ignoring the jurisdiction issue of "worldwide turnover" - Google is (presumably, though unconfirmed through a rapid unbranded search) a limited liability company, meaning it's misdemeanours should not be passed to the parent.
11:19 am on June 27, 2017 (gmt 0)

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here's a link to the official EU press release just in case anyone here wants to read it

[europa.eu...]
11:35 am on June 27, 2017 (gmt 0)

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If Google wasn't so very dominant in the industry it wouldn't have this issue, imho.

Clearly, it disagrees with the findings.

I get the impression is doesn't quite "get it" as to why it was fined, only citing itself as a competitor, for example, to Amazon. It doesn't see the fact that it's a search engine, and that's the point.
11:40 am on June 27, 2017 (gmt 0)

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They seem to be confused between the difference between monopolistic abuse and anti-trust.

"We're not the biggest price comparison site"
Vs
"We've not leveraging dominance in one field to distort the market in another field"

ETA -
This seems to actually be a difference in US vs European law. Interesting.
[en.wikipedia.org...]
11:44 am on June 27, 2017 (gmt 0)

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God knows what sort of negotiations take place behind the scenes and small businesses never have a say

in 2014 internal emails were suggesting that google shopping product was simply not working but then amazingly started to send 50% of the shopping traffic, one wonders what did they fix to make it such a successful product?
12:03 pm on June 27, 2017 (gmt 0)

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Further to previous, and interestingly, there seems to be an element of "activist judge" about this.

As a citizen of the European Union (at time of writing, anyway), I have always been clear that the law does not allow you to leverage strength in one area to distort related markets. But this seems to be a rather broad reading of the law as written, which is close to the US law.

Abusing market position has been interpreted to mean distorting adjacent markets, but it is far from clear that was the intent. The law seems to want to stop prices being manipulated, ensure innovation is not suppressed, and stop suppliers being deterred from supplying potential competitors and customers from having choice of suppliers. But critically, only within the dominated market.

The only provision directly applying to "other" markets is a monopoly adding contractual terms unrelated to the contact at hand; "to buy my oranges, you must commit to buy apples from Bob".

So, definitely an alien world to a foreign legal culture. But still, entirely consistent with established modus operandi.
12:12 pm on June 27, 2017 (gmt 0)

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There's inevitably politics involved in these decisions, though from the technical standpoint I'm sure many would agree that the law has been playing catch-up, and big tech over the past 10 years has been taking various liberties with market dominance, privacy and 'fair' taxation. Hopefully this is a good thing for the market/web in general wrt market dominance.
12:15 pm on June 27, 2017 (gmt 0)

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Not sure about the "activist judge" charge but the last commissioner wasn't one of the better ones and there's a lot of competition for worst ever commissioner.

Regards...jmcc
1:20 pm on June 27, 2017 (gmt 0)

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I wonder when the U.S. authorities will stop Google from strangling the U.S. consumer and U.S. small business, by an abundance of "dominance abuse" tricks & practices. To date, U.S. authority inaction on this "elephant in the room" has been disastrous both for U.S. consumers and small / medium businesses - and truly disgraceful. Nothing less than dereliction of duty.

Breaking up data collection/storage and search presentation is the best way out of the nasty situation prevalent today.

Kudos to the EU. Expect more to come.

.
2:40 pm on June 27, 2017 (gmt 0)

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It doesn't see the fact that it's a search engine, and that's the point.


Well, somehow it is no longer a search engine and rather a "copyright violating money making machine". Just look at how they are stealing our content and posting it in featured snippets, how they are stealing/hotlinking our full size photos and showing them in Images Search so that people no longer need to visit our websites and stay on Google, look at the crap search results that harm small business and that favor big brands and other copyright violating colleagues like Pinterest,
3:04 pm on June 27, 2017 (gmt 0)

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chrisv1963 We can block them from "stealing our content" if we so choose. ;)
The problem is the domination and favoring of their own over competitors which is the problem.

There are few examples in business that are similar on a global scale. The biggest example I can find was Standard Oil. If you don't know, the history is easily found online, but, it became an "unreasonable" monopoly and was broken into smaller businesses.
5:52 pm on June 27, 2017 (gmt 0)

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chrisv1963 We can block them from "stealing our content" if we so choose. ;)

You can stop somebody stealing your property by locking your doors but that doesn't give anybody the right to help themselves if you leave a door unlocked.
6:03 pm on June 27, 2017 (gmt 0)

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We can block them from "stealing our content" if we so choose. ;)


You can't lock your doors for Google. They have a monopoly. If you lock your doors, your online business is dead within weeks. Thus, you have to accept the theft to keep your business alive.
1:03 am on June 28, 2017 (gmt 0)

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Slippery slope.

I am no google fan boy, google is my competitor and we have had our battles. This ruling however should scare anyone with a website. I do not want the government telling me what I have to put on my website. google is a private website, a business, and the government is telling them they have to promote their competition on their website. Ridiculous. Most of the meek and the weak love to see google getting pounded by the government, they think that somehow this is going to make their business better. Good luck with that.
2:24 am on June 28, 2017 (gmt 0)

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What Google did was essentially deceptive. The user had an expectation that all shops would be fairly treated in the SERPs. However, what Google did was to boost its own shopping results at the expense of others in the SERPs. Google has a high percentage (80% or more) of the search engine traffic so this had an effect on the market. If a niche seems successful, Google will try to muscle in on it like a two bit thug with a protection racket. It tried to muscle in on the Social Media business with its Google+, Buzz and a few others but they crashed and burned. The shopping thing was an attempt to muscle in on this niche using its search engine. The EU seemed to take such matters seriously and hit it with this record fine. And there are still cases against Google outstanding. The problem with a lot of the earlier commentary (prior to the imposition of the fine) on this and other EU vs Google cases was that the commentary was purely from the point of view of SEO and web dev heads whereas this issue are both a legal and political ones.

Regards...jmcc
8:10 am on June 28, 2017 (gmt 0)

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I'm no fan boy either.
the government is telling them they have to promote their competition on their website.

Two things in response to that.
1. The Commission is not telling them to promote the others, it's telling google not to promote its own above the competition, and to not deliberately demote the competition.
2. This is aimed at a significant dominant player, not you and me, unless we got into a similar dominant position.

It'll be interesting to see if Google decides to fight their corner, or to comply, and if they do, how they will comply. 60-days to respond, or 90-days to end the practice.
The rules of doing business in the EU are the same for every business, large and small, and that applies to
9:01 am on June 28, 2017 (gmt 0)

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It will be interesting to see how they respond, will they role back the FRED update? I know some price comparison sites were hit with a 90% traffic reduction with that update. The site owners may be able to hold a civil case against Google for financial damages? if they are based in the EU.
9:30 am on June 28, 2017 (gmt 0)

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It is also important in this discussion to remember that market dominance is not evil per se. Abuse of market dominance is the issue here, and Google has been culprit by an array of nasty tricks and practices. Their game to date has been to proceed ruthlessly, as long as they were allowed to do so, and pay some ridiculous fines along the way, insignificant to the loot.

Hope this well-calculated racket will not be allowed for much longer. Shame it has been allowed to prosper for so long.

But I am not holding my breath. Google, beyond being a business, is a useful procurer of information to the American Deep State Apparatus. There has always been a "Hands-off-Google" undercurrent by that State. Is the U.S.A. a true democracy as democracy is perceived in Europe, where "types" like Google would not be allowed to abuse & thrive? Many would laugh even at the notion.

.

.
10:20 am on June 28, 2017 (gmt 0)

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procurer of information to the American Deep State
Google=Pollyhop?

I agree that the issue is abuse of market dominance that is the issue. I'm just not sure that Google has actually abused market position per the law (as opposed to per common sense, which seems obvious). The law seems to want to avoid customers and suppliers being contractually obliged to not use any competitors, or to allow price manipulation, or to suppress innovation.

Google is not making contractual demands of users. There is no price to manipulate. Suppliers (that's ecom sites) are free to list elsewhere. Google is innovative.

Shopping, blended into SERPs, just seems to be a form of internal advertising. Surely we, site owners, are not obliged to co-advertise competitors? It's even marked up as advertising.

I'm also unconvinced that Google is "demoting" competitors. Searching "Price comparison toaster" (not my niche) gives acceptable results. Searching "toaster" does not have any price comparison sites, but not because they are demoted. They are just a minority interest for most searchers (unless they add the magic qualifier "compare")

Now, I have skin in the game here, as we do well from Shopping results (and very badly from the Products tab). However, I am deeply concerned that you can heftily fine a company basically because you don't like them.

Google is extremely uncooperative with the EU, in terms of:
- Taxation
- Privacy
- Copyright
- Law Enforcement

Other US tech firms are the same. Ask any law enforcement, and they will tell you the problems of subpoenaing tech firms for domestic issues such as terrorism.

I would support breaking Google up, as with Standard Oil. Probably Amazon too.

I do not support an overly broad interpretation of the law to "justify" taking a few billion off them because you don't like the cut of their jib.

Don't get me wrong, I'm as happy as the next guy that they are getting fined. But it's more natural justice than legal justice IMHO. Obviously, IANAL.
10:28 am on June 28, 2017 (gmt 0)

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@Shaddows : regrettably you have no understanding of *existing* anti-trust, anti-monopoly law (both U.S. and EU), and work on personal perception. This is no good basis for discussion. And, it is none of my business to teach, sorry.

.

[edited by: heisje at 10:29 am (utc) on Jun 28, 2017]

10:28 am on June 28, 2017 (gmt 0)

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The user had an expectation that all shops would be fairly treated in the SERPs.

Irrelevant, google's SERPs are not a public service.

1. The Commission is not telling them to promote the others, it's telling google not to promote its own above the competition, and to not deliberately demote the competition.

Scary that anyone would believe there is a difference there.

2. This is aimed at a significant dominant player, not you and me, unless we got into a similar dominant position.

As the "significant dominant player" in our niche, government meddling like this makes me very nervous.


All I'm saying here is: be careful what you ask for, you just might get it. If you are going to encourage the government to come in and regulate a fellow website, don't start crying if/when the government comes knocking on your door.
10:30 am on June 28, 2017 (gmt 0)

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Google should apply it's own algorithm to it's shopping service, I imagine the site would be around page 40 for any search term.
11:08 am on June 28, 2017 (gmt 0)

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regrettably you have no understanding of *existing* anti-trust, anti-monopoly law (both U.S. and EU), and work on personal perception. This is no good basis for discussion. And, it is none of my business to teach, sorry

Not true!

See my original posts in this thread. I started out as a low-information poster. I then educated myself.

I strongly believe it is you who does not understand the law as written as opposed to as interpretted by a commissioner with an axe to grind.

I have educated myself. I suggest you do the same. It is none of my business to teach, sorry.
11:12 am on June 28, 2017 (gmt 0)

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Google should apply it's own algorithm to it's shopping service, I imagine the site would be around page 40 for any search term.

Sure, except it is returning shopping results as advertising, not as a SERP result for a price comparison tool.
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