Google Rolls Out Search, Shopping Ad Changes In Europe

Google Rolls Out Search, Shopping Ad Changes In Europe

Google Rolls Out Search, Shopping Ad Changes In Europe

You may remember the hefty fine that Google was charged with back in June: at $2.7 billion, it was the largest fine ever issued by the European Commission, and industry experts have previously stated that the ruling could have far-reaching impacts on antitrust behavior in Europe.

The standalone Google Shopping unit will have to bid with other shopping sites for ad placement on top of Google's product search results page, Bloomberg News reported September 26 citing unnamed sources. The European Commission held that the world's biggest search engine had abused its dominance by discriminating against rival comparison-shopping services.

Google, a unit of USA firm Alphabet, has until September 28 to halt this anti-competitive practice or face a penalty up to 5% of its average daily worldwide turnover.

The Commission handed Google a €2.42 billion antitrust fine in June for promoting its own services over rivals' the largest fine in European Union history. "There are no reserved slots for Google Shopping or other CSSs [comparison shopping services]", Google writes in an explainer graphic posted to the Google Europe Twitter account.

As The Wall Street Journal points out, while shopping-related companies and merchants will have the chance to bid in Google's ad auctions, the sheer amount of competition is likely to mean exceptionally high bidding prices and consequently, minimal profit, if any.

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It is less clear whether Google is making any changes to how it displays rival search comparison services within search results.

In the case of Google, rivals had long complained that the company gave itself an unfair advantage by automatically putting some of its services at the top of so-called specialized search results.

In a Q&A with journalists yesterday Vestager was asked whether it expects Google to also make changes to how rivals search comparison services are displayed in search results and her response suggests it places the most weight on a combination of both behaviors.

In a statement to CNBC, a spokesperson for Margrethe Vestager, the EU's Competition Commissioner, said the Commission has taken note of Google's announcement. The company has denied the practice robs others of native search traffic to their sites. It also added the prospect of a fine of 5 percent of its daily revenue each day if the company didn't fix the problem by this Thursday. "The industry is on its knees, and this is not going to put it back", said Mr. Stables, who has made a decision to participate in Google's new auctions despite misgivings.

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