Google improves efforts to dodge fines on shopping ads, EU says

Google was told by the EU to grant equal treatment to other comparison-shopping services in product listing ads on top of the Google search page.

By: Bloomberg

June 19, 2018 03:28 PM IST

3 min read

Google risks daily fines of up to 5 percent of its global daily revenue if it fails to comply with the terms of the EU’s antitrust order. (Image: Bloomberg)

Google seems to be giving rivals a better deal in shopping search ads — but the EU’s antitrust chief says it’s too soon to say whether the search-engine giant has done enough to avoid more fines on top of last year’s record 2.4 billion euro ($2.8 billion) penalty. There’s been a “steady increase” in the number of rival products showing up in shopping search ads, Margrethe Vestager told lawmakers at the European Parliament in Brussels on Monday. Rival products pop up in at least a third of shopping slots compared to 15 per cent in March, she said. The share of clicks on rival product results also increased from 2.5 per cent in February to 6.1 per cent now, she said.

“Still not many, but many more,” Vestager told EU lawmakers. “There is an uptake, also the inventory of rival” ads “is increasing compared to what it was just a few months ago,” she told reporters after the meeting. “We have taken no decision, neither on one side to say that this is fine, nor to the other to say, ‘no, it’s not.’”

Google was told by the EU to grant equal treatment to other comparison-shopping services in product listing ads on top of the Google search page. The company set up an auction system to sell the ad spots to rivals alongside its own shopping unit. Websites Kelkoo.com and Foundem called on the EU to fine Google for failing to comply with last year’s order because few rival ads seemed to be winning spaces earlier this year. Google risks daily fines of up to 5 per cent of its global daily revenue if it fails to comply with the terms of the EU’s antitrust order. A Google representative in Brussels didn’t immediately respond to a request for comment.

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Google Shopping has grown quickly since 2009 to account for as much as a fifth of the highly profitable ad revenue Google generates, according to industry estimates. Andreas Reiffen, chief executive officer of search firm Crealytics, estimated last year that the format accounts for roughly a quarter of ad revenue in Europe.

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