Google has been ordered to pay a €460 million penalty to Germany-based price comparison portal Idealo. The lawsuit alleged that Google abused its dominant position in the search engine market to promote results from Google Shopping instead of its competitors. The landmark ruling also pushes Google to pay an additional fine of €107 million to a similar portal.
More About The Lawsuit
Idealo filed a lawsuit against Google stating that the company showed more results from Google Shopping instead of displaying links from other portals. The German portal demanded 3.3 billion euros from Google for this unfair trade practice between 2008-2023, including amount for damages and interest. After listening arguments from both parties, a German court has ruled in Idealo’s favor, asking Google to pay to a €460 million fine.
As a part of the same hearing, Google will also have to pay a €107 million fine to Producto, another Germany-based price comparison website. Google has rejected the ruling and it says that the company will appeal against it. A spokesperson mentioned that Google amended its results page, giving equal opportunities to all online websites to show relevant product links in search, in addition to Google Shopping. It also states that this change was implemented in 2017, and since then, the number of price comparison websites in Germany has grown from seven to 1550.
At the time of publishing this article, Google is required to pay fines and penalties exceeding 500 million euros in the said case. However, the payment schedule and other compensatory timelines have not been revealed, as Google has refused to accept the ruling. This puts the company in a major tussle, as delaying the fine payment without any valid argument or appeal may worsen the situation, as per the law.
Why This Matters
It is an open secret that Google is the default search engine for most users globally. When someone searches for a specific product, they are shown direct links to the product, which are a mix of affiliate, sponsored, and organic search results. However, Google also has its own Google Shopping portal which works as an online link aggregator, and the company gets a commission each time someone completes a purchase through Google’s links. This concept is called affiliate marketing, which is legal.
However, as per the allegations, when Google suppresses other price comparison pages to promote links from its in-house shopping portal, it becomes a unfair trade practice as external websites have no other place for their business. The idea is similar to a construction company putting its own shops in a mall, instead of giving shops to other businesses.
While the German court finds Google guilty of the aforesaid practice, it will get an opportunity to defend itself through an appeal. It will be interesting to see how Google responds, because if they fail to defend, it will open floodgates to new lawsuits, and even class actions as the company is accused of many such unfair trades using its Google Search portal.
