EU Fines Google $2.72 Billion For Unfair Practices

The European Commission, which polices European Union competition rules, has imposed a  €2.42 billion euros ($2.72 Billion) fine on Google for breaching antitrust rules with its online shopping service.
 
The ruling alleges that "Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service." Google was given 90 days to stop or face fines of up to 5 percent of the average daily worldwide turnover of parent company Alphabet.
 
The EU has found that Google has been pushing its own comparison-shopping service since 2008, systematically giving it prominent placement when people search for an item. Rival comparison sites that might have better deals usually only appear on page four of search results, effectively denying them a massive audience as the first page attracts 95 percent of all clicks.

What It Mean to Stock Photography?

The stock photo industry is particularly interested in this decision because Google’s scraping practices of images tend to stifle on-line competition, discourages investment in creativity and criminalize users.

Google Images frames images resulting from search queries with a deep link to the source website and shows these images in the same resolution as on the original website. Images are displayed against a dark background, out of context and away from the hosting website, therefore disconnecting the consumer from the image’s original website. The user may right click the image on its laptop and/or share it per email or social media. Only a tiny grey note at the bottom of the webpage reminds users that images “may” be protected by copyright.



This Google Images’ format, introduced in 2013, has dramatically reduced the click-through rate to the source websites, depriving image owners of proper attribution and traffic. By disconnecting images from their source website, the damaging format encourages “unconscious” piracy; it breaks the value chain from the photographer, illustrator or artist creating the image to the publisher of the images over the picture agency or other representative of the visual artists.
 
CEPIC notes that the European Commission will continue to “investigate Google’s treatment in its search results of other specialized search services”. These services include Images, Maps, News, Travel and many more.

Google’s Argument

Google maintains it's just trying to package its search results in a way that makes it easier for consumers to find what they want.
 
"When you shop online, you want to find the products you're looking for quickly and easily. And advertisers want to promote those same products. That's why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both," Kent Walker, senior vice president at Google, said in a statement.
 
"We will review the Commission's decision in detail as we consider an appeal, and we look forward to continuing to make our case," he said.
 
The search-engine giant will have “the sword of Damocles hanging over its head,” said Jay Modrall, a lawyer for Norton Rose Fulbright in Brussels. That’s because it’s no longer Google’s choice on how it makes changes to allay EU concerns. Instead, it’s “under a legal requirement to do so and under notice that if its commitments are not sufficient, it’ll be fined even more.”

The fine is the highest ever imposed in Europe for anti-competitive behavior, exceeding a $1.19 billion penalty on Silicon Valley chip maker Intel in 2009.
 
But the penalty is likely to leave a bigger dent in Google's pride and reputation than its finances. Alphabet has more than $92 billion in cash, including nearly $56 billion in accounts outside of Europe.