Google Makes Big Concession in Europe to Avoid More Antitrust Fines

September 27, 2017, 4:44 PM UTC

Google will treat its own shopping service the same as rivals when they bid for ads at the top of a search page, the firm said on Wednesday, as it seeks to comply with an E.U. antitrust order and stave off fresh fines.

The European Commission slapped a record 2.4-billion-euro ($2.8 billion) fine on the world’s most popular internet search engine in June and told the firm to stop giving an unfair advantage to its shopping service.

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

The company said competitors will be able to bid for ads in the shopping box via an auction, confirming a Reuters report on Sept. 18.

“We’re giving comparison shopping services the same opportunity to show shopping ads from merchants on Google’s search results pages as we give to Google Shopping,” spokesman Al Verney said.

“Google Shopping will compete on equal terms and will operate as if it were a separate business, participating in the auction in the same way as everyone else,” he said.

About a dozen rivals out of an estimated 200 to 300 comparison shopping services in Europe have already provided feeds to Google. Several have criticized the proposal for not addressing the regulatory concerns.

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Deutsche Bank analysts estimate the European product listing ads (PLAs) business should generate between $4 billion to $5 billion in 2017, representing about 5% of the company’s total ad revenue.

Analyst Lloyd Walmsley estimated that if Google was forced to make changes, it could lop 30% off of these revenues, or about 1-2% of Alphabet’s total revenue.

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