Google's ongoing regulatory headaches in the EU have today resulted in a whopping $2.7 billion fine, the most significant regulatory penalty in the EU since the 2004 Microsoft decision. This fine stems from Google's handling of shopping searches and the way its own comparison tools are allegedly given preferential treatment. It's now up to Google to change its search practices, and that could affect the way it operates in other regions as well.
According to a statement provided by EU commissioner Margrethe Vestager, Google's shopping tools are violating EU law in two ways. First, it gives prominent placement to its own shopping service in the form of "sponsored" results at the top of the search page. These results take you to Google Shopping, which makes Google money. Second, the EU believes that other shopping comparison services are being unfairly demoted in search results. Because Google's shopping ads are not subject to the search algorithm, it has an unfair advantage, according to the European Commission.
Google says its sponsored results provide a way for consumers to find what they're looking for quickly, and offer a valuable opportunity for advertisers to connect with consumers. It also notes that competing shopping platforms like Amazon and eBay have grown considerably while Google Shopping (originally called Froogle) has been in operation. Additionally, the Google Shopping items are clearly marked as "sponsored." The fine is based on the revenue of Google's shopping comparison service across the 13 EU countries concerned. To put the $2.7 billion fine in context, Google's 2016 revenue was almost $90 billion.
Google has 90 days to pay the fine and make changes to its operations in order to avoid more penalties. Google has to come up with a remedy on its side, which is then approved by the EU Commission. However, Google general council Kent Walker notes that Google disagrees with the decision and will consider an appeal. It might not be in Google's best interest to get on the European Commission's bad side—there are still ongoing investigations of Android and online advertising.