Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) subsidiary Google is under fire in the European Union for failing to alter its business practices even after it was fined, the Financial Times reported Sunday.
What Happened: A study commissioned by 25 shopping sites that looked at 10.5 billion clicks indicated that less than one percent of traffic through Google Shopping is being directed to rival sites such as Kelkoo and Idealo, according to FT.
The study, undertaken by Lademann & Associates, is the first such comprehensive empirical research that shows that Google still undermines competition, Thomas Hoppner, a lawyer advising the companies, told FT.
The analysis was reportedly conducted three years after Google made changes to its shopping search after the European Commission fined it $2.7 billion for favoring its own comparison shopping service and “demoting those of competitors.”
Olivier Guersent, who heads the EU’s Competition department, said officials were seeing “positive developments” after Google made changes in its shopping search.
Why It Matters: Hoppner alleged that Google’s main search results, a key source of traffic, remain unaffected by the changes. He claimed the remedy deployed by the Sundar Pichai-led company “has not improved the competitive situation at all.”
Google is contesting the fine and the European General Court’s decision is expected at the end of the year, FT noted.
In July, the Google parent was hit with a record $5.1 billion fine from the EU after the bloc alleged that it had used its Android operating system to establish the dominance of its own search engine.
Price Action: Alphabet Class A shares closed almost 1.1% higher at $1,439.06 on Friday. On the same day, the company’s Class C shares closed almost 1.2% higher at $1,444.96.