Google Is Fighting a Losing Battle With the EU

The unexpectedly large fine the European Commission has slapped on Google -- 2.4 billion euros ($2.7 billion) -- is evidence that the search giant's relationship with European regulators is now a vicious circle of escalation. Google's reluctance to give up any revenue from its fastest-growing ad format may lead to significant, unpredictable losses in its biggest market outside the U.S.

The case in which Competition Commissioner Margrethe Vestager announced the fine on Tuesday is seven years old. It began when the U.K. shopping comparison engine Foundem complained to the commission that Google was promoting its own rival service, then called Google Product Search and later renamed Google Shopping, to the detriment of competitors. The case grew as other European and U.S. companies jumped on the bandwagon. Google thought its troubles were over in 2014 when it almost agreed on a settlement with Vestager's predecessor Joaquin Almunia -- but the complainants were acutely unhappy with the proposed document. They didn't want to buy ads that Google promised to place at the top of the search results page, insisting instead that Google display "organic" results.