Google to pacify EU by creating shopping service unit to bid fairly on ad space
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Google to pacify EU by creating shopping service unit to bid fairly on ad space

European Union (EU) antitrust regulators have famously had a problem with Google this year – and now, the company will address it through the creation of a new unit in its Shopping service. One of the EU’s problems with Google was the valuable advertising space at the top of its search engine results and how Google allocated it: would the company’s own products get privileged treatment? Today, the deadline to comply with the EU’s antitrust order to give equal treatment to Google will deal with that problem: by creating a Google Shopping unit that is responsible for its own ad bids – and isn’t subsidized by its parent company.

Google’s share price is up 21% so far this year

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SOURCE: Yahoo Finance

The EU told Google that it had to stop promoting its own products and services above those of its competitors in its search engine. In practice, this means auctioning out the advertising space at the top of the search results page in the same way it would any other advertising space: and if Google wants it for itself, it will have to bid on it. The EU made its ruling in June, when it fined Google €2.4 billion, and told the company it had until September 28 to comply. Failure to do so could see it fined an additional 5% of daily revenue.

Google has 10 advertising slots at the top of its search results that showcase relevant products. These slots will now be auctioned out, but if Google Shopping wants one, it will have to bid on it like everyone else. The company declined to comment on the matter.

Disclosure

Dominion holds Alphabet, the parent company of Google, in its Global Trends Managed Fund.


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