The European Union fined Google €2.42 billion, $2.7 billion, for breaking antitrust. The decision comes after a 7-year investigation into the company’s search engine algorithms. The judgment specifically focuses on Google Shopping which compares prices from retailers local and online. The EU claims Google deprived reveal price comparison sites regardless of their merits. What’s being said here is, Google favored their price comparison service over competitors who may have offered better selections or prices.
The record-breaking fine is a clear message to Google on how severe their antitrust violation was. The largest fine before today’s judgment was against Intel in 2009. Apart of the fine, Google is given the chance to alter their search algorithm. It’s unlikely Google will fold over and alter their search algorithm. Instead, Google will appeal the decision, delaying the final judgment for years or even decades.
Why did Google get fined when Amazon favors their highest margin items
The news of Google receiving the $2.7 billion antitrust fine was shocking, but more interestingly, it’s surprising to see Google Shopping was the focus on of the judgment. When you think shopping, you think Amazon and not Google. While yes, Google is a great place to search for where you can buy a new TV. I wouldn’t say it’s the best place to compare prices. That’s where you head to Amazon. You’ll often see Amazon places their products front and center, even when your not searching for their products. If you’re looking for batteries you’ll see the Amazon basic brands or the ones with the highest margins first, then below those options, you’ll see the best sellers and the highest rated ones. That favoring of the highest margin items seems more anti-competitive than Google showing their products before some other options.
Where I see Amazon antitrust violation is across every search on the site. You’ll often see Amazon places their products front and center, even when your not searching for their products. They shove the Echo, Fire tablet, and Prime down your throat. If you’re looking for batteries you’ll see the Amazon basic brands or the ones with the highest margins first, then below those options, you’ll see the best sellers and the highest rated ones. That favoring of the highest margin items seems more anti-competitive than Google showing their products before some other options.
Amazon is a marketplace where anyone can buy and sell, and Google is a search engine where Google skims the web to show data. In no way does Google benefit from showing you that Bestbuy has an item cheaper than Newegg. If Google had shown their store before all the other choices and sold that item for a higher price I could understand the antitrust judgment. Amazon is a platform that should be open, and Amazon should have an antitrust investigation going on before Google Shopping.
Google is also the target of two other antitrust investigations for its AdSense business and their Android operating system. The company will have a lot more scrutiny from the EU if they choose not to comply with the Google Shopping judgment. Either way, U.S. based businesses are collectively unsettled. They often claim the EU is targeting U.S. business, but the data shows most EU antitrust investigations focus on European-based companies.
Let me know what you think? Do you think Google deserved the antitrust judgment or is Amazon a more likely canidate?