REPORT: Europe plans to hit Google with a €1 billion-plus fine over its shopping tool (GOOG)

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June 16, 2017 9:54 AM

Silicon Valley has had a strained relationship with Europe for a decade. This won't help matters.

Google CEO Sundar Pichai.

The European Commission may hit Google with a record fine of over €1 billion (£874 million) over antitrust issues, according to a report from The Financial Times.

The European institution has accused the Californian technology giant of promoting its own shopping service in its search results over those of its competitors, alongside two other antitrust investigations: One over Android, its mobile operating system, and another relating to its online search advertising business.

The FT reports that an announcement on the the shopping case will be made "in the coming weeks," and Google may be slapped with a fine of more than €1 billion.

It's a move that seems likely to further erode already tense relationships between American tech giants and the European regulators. Last year, Apple was hit with a record €13 billion (£11.3 billion) tax bill after the Commission, led by commissioner Margrethe Vestager, ruled its tax arrangements in Ireland amounted to "state aid." (Apple and Ireland both challenge this.) This rocky relationship stretches back a decade, with the landmark antitrust case against Microsoft in in the 00's.

Google did not immediately respond to Business Insider's request for comment, but has previously denied any wrongdoing.

In a blog post published in November 2016, Google general counsel Kent Walker argued that the European Commission, in preparing its original complaint, "failed to take into account the competitive significance of companies like Amazon and the broader dynamics of online shopping.Our response demonstrated that online shopping is robustly competitive, with lots of evidence supporting the common-sense conclusion that Google and many other websites are chasing Amazon, by far the largest player on the field."

He repeatedly pointed to Amazon while challenging the Commission's argument, highlighting that one-third of online consumers in Germany start on Amazon ("versus 14.3% with Google").

"There is simply no meaningful correlation between the evolution of our search services and the performance of price comparison sites," he wrote. "Meanwhile, over those same ten years, a rapidly increasing amount of traffic flowed from our search pages to popular sites like Amazon and eBay as they expanded in Europe, hardly a sign of our 'favouring' our own ads."

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