Google is reportedly spinning off its comparison shopping service into a “standalone unit” after it was the subject of a record €2.42 billion fine ($2.7 billion) from the European Union. According to a report from Bloomberg, the tech giant will comply with the EU’s ruling by separating Google Shopping from the rest of its search business. The service will remain part of Google itself, but will “operate separately and use its own revenues to bid for ads.”
The EU targeted Google Shopping in a seven-year antitrust investigation that culminated in the fine this June. EU competition commissioner Margrethe Vestager said Google had “abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.” As well as the fine, the company was ordered to change its business to comply with “the simple principle of giving equal treatment to [rivals].”
The EU’s investigation found that when users searched for products to buy in Google Shopping, the company systematically displayed its own links above those from other shopping comparison sites — regardless of relevancy. Bloomberg reports that the company will amend this by letting rivals bid against Google Shopping to occupy these advertising slots at the top of the page. In an effort to create a level playing field, Google’s own bids won’t be subsidized by revenue from its main ad business.
Google is expected to unveil its plans in full on Thursday, although competitors say the reported changes don’t go far enough. UK shopping site Foundem, which filed a 2009 complaint to the EU that triggered the investigation, said the “pay-for-placement” system simply creates “an additional anti-competitive barrier.” Google did not respond to Bloomberg’s request for comment.
The EU targeted Google Shopping in a seven-year antitrust investigation that culminated in the fine this June. EU competition commissioner Margrethe Vestager said Google had “abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.” As well as the fine, the company was ordered to change its business to comply with “the simple principle of giving equal treatment to [rivals].”
The EU’s investigation found that when users searched for products to buy in Google Shopping, the company systematically displayed its own links above those from other shopping comparison sites — regardless of relevancy. Bloomberg reports that the company will amend this by letting rivals bid against Google Shopping to occupy these advertising slots at the top of the page. In an effort to create a level playing field, Google’s own bids won’t be subsidized by revenue from its main ad business.
Google is expected to unveil its plans in full on Thursday, although competitors say the reported changes don’t go far enough. UK shopping site Foundem, which filed a 2009 complaint to the EU that triggered the investigation, said the “pay-for-placement” system simply creates “an additional anti-competitive barrier.” Google did not respond to Bloomberg’s request for comment.