Google to ringfence shopping unit to avoid further European Union fines

Bloomberg says Google is splitting off its shopping service to avoid European Union fines

The world's most popular search engine owner said Google Shopping and its competitors would now bid on equal terms for ads in the shopping box.

As part of this change, ten advert slots at the top of the search screen will be auctioned off to give rival sites a chance to buy space.

Google spokesperson announced the company plans to take measures to treat its shopping service the same as rivals to prevent further European Commission fines.

Google was set a deadline of 28 September to change its practices, or face huge daily fines.

"Unless Google is volunteering to break up its general-and specialised-search businesses, the inclusion of Google's comparison shopping competitors into a new or existing pay-for-placement auction would simply create an additional anti-competitive barrier", it said.

Regulators claimed that the company abused its search market dominance to give its Google Shopping service an advantage over other retailers.

The shift comes after Google was hit by a record antitrust fine of 2.4bn euros ($2.7bn; £2.2bn) in June for unfairly favouring its own service over those of its rivals.

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European Union is also investigating two other charges on the search giant, including whether Android operating system is used to promote its own products.

Indeed, Competition Commissioner Margrethe Vestager said of the changes, "I have learned not to let my happiness depend on site design, and I think I should keep it that way".

Vestager also said the Commission has signed a contract with accountancy firm KPMG and SEO and marketing company Mavens, via an open tender, in order to provide expertise to help it monitor Google's compliance.

The ads from comparison shopping services will appear in the same place above results for product searches as did ads directly from merchants.

While Google's service will be able to bid for the slots, those bids won't be subsidised by Google, Bloomberg said, though the changes will only apply to Google's Europe business. Here Google is now letting anyone bid for the ads it displays at the top of product related search results - rather than, as was the case before, displaying links to products that merchants had paid it to display at the top of search results. "The industry is on its knees, and this is not going to put it back", said Mr. Stables, who has made a decision to participate in Google's new auctions despite misgivings.

Google must also submit a report on its compliance every four months. Google presented its plans to the commission at the end of August but did not make them public until Wednesday.

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