Solicitor Advocate John Carruthers discusses Google’s recent fine
The European Commission fined Google €2.4Bn for a breach of Competition law last week.
Competition law may seem far removed from our day to day lives but it is important as it attempts to ensure fair play in the market. Google dominates the search market with a 95% share. Dominance is not illegal but abusing your dominance is. Google is the gateway to the internet. This gives it huge power to affect online behaviour, prices and spending patterns.
Google’s power can be simply demonstrated. The ten highest-ranking generic search results on page one generally receive approximately 95% of all clicks. The top result receives about 35% of all the clicks. The importance of getting your web site on page one of Google makes all the difference to successful online trading.
The Commission have found Google guilty of breaching competiton law and of using its dominance to promote its own comparison shopping services at the expense of independent web sites promoting the same services.
What Google did was very simple and very effective. It promoted its own shopping services to the top of Google and demoted its rival’s rankings.
The impact of Google’s behaviour on its competitors was profound. Since the beginning of each abuse, Google’s comparison shopping service has increased its traffic 45-fold in the U.K. The Commission found evidence of sudden drops of traffic to certain rival websites of 85% in the U.K.
Google can decide whether you are visible on the internet or not. This can have a potentially profound effect on consumers, retailers and innovation.
It is likely Google will appeal the Commission’s decision resulting in years of litigation. There is also a raft of related challenges from disappointed competitors currently going through the courts.
The European Competition Commission has urged anyone who believes they have been harmed by Google’s illegal behaviour to use their report in court as part of their evidence.
The Commissions massive fine will not be the last but the first word in this saga.
Click here for further information on the Competition Act