Google has been dealt a nasty verdict in one of its European antitrust cases. After many years of investigations and attempted settlements, the EU a few weeks ago found Google to have abused its position in internet search. Google received a record €2.4 billion fine (around $2.87 billion), and the search giant still has to modify its business model in the region to not to favor its own services in search.
A new report from Reuters says that Google has offered to display rival shopping comparison sites via an auction to comply with the EU’s orders.
In other words, instead of placing its own products on top of search, something competitors complained about, Google wants to offer them a chance to bid on those positions. After denying those positions to competing products for years, and depriving them of potential revenue, Google would now make money off of winning bids, and that’s if the competitors are willing to spend more than Google.
One worry is that Google may set a high cap for its own bids and force rivals into bidding much of their profits to gain the same search placement as Google’s own products.
The proposal is not available yet, but it leaked from four people familiar with the matter who talked to Reuters. Meanwhile, The Wall Street Journal also confirmed the existence of the proposal.
Competitors would be allowed to bid for any spot in its shopping section that’s known as Product Listing Ads, these people revealed. The proposal is similar to something Google offered three years ago when it tried to settle the case. Last time around, Google kept the first two places for itself. But now, it’s willing to allow anyone to bid for these places, Google included. Google would also set a floor price with its own bids minus operating costs. Rivals could outbid Google should they choose to pay more than Google’s self-imposed limits.
The people told Reuters that the offer doesn’t address the issues the EU wants to be fixed. The Commission ordered Google to treat rivals and its service equally. “This is worse than the commitments,” one unnamed individual says.
The Journal explains that if the EU doesn’t approve Google’s offer, it may slap additional fines, amounting to up to 5% of average daily global revenue for the period Google isn’t complying with the EU’s orders on the matter.