Alphabet’s Google is reportedly transforming its Google Shopping service into an independent unit within the company, according to news from CNBC.
Citing a person familiar with the company’s plan, CNBC reported the standalone unit will have to bid against other websites for advertising placement when product listings are displayed online.
The decision comes about as an effort to appease European antitrust regulators and to avoid paying more fines. In June, Alphabet’s Google was slapped with a record $2.7 billion in fines over antitrust practices with its comparison Google Shopping unit. While the unit will still be part of Google, it won’t be able to integrate with the company’s search business and the way shopping advertisements show up online could also be redesigned, noted the report.
Google’s reinvention comes after its previous offer to play nice with other shopping comparison sites was not well-received. Citing four people familiar with the matter, Reuters reported last week that, in a proposal submitted to the European Commission in late August, Google said it would let rivals bid for spots on its Product Listing Ads section in the shopping section on its website. Feedback from that proposal had largely been negative.
In an interview with Reuters, Foundem, the U.K. price comparison company that prompted the EU investigation and subsequent regulation back in 2010, told Reuters it was not satisfied with the auction offer. “Unless Google is volunteering to break up its general and specialized 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,” the company told Reuters.
