Google will separate its shopping business from search to try and avoid more European fines

Google CEO Sundar Pichai speaks during Google I/O 2016 at Shoreline Amphitheatre

Alphabet’s Google unit later this week will make its shopping service a stand-alone business within Google’s operations and require it to bid against other sites for ad placement at the top of search results, says a person familiar with the company’s plans.

The company will make the change to try and satisfy European antitrust regulators and avoid further fines, said this person, who requested anonymity in exchange for details about the plan. The plan was previously reported by Bloomberg.

The shopping unit would remain part of Google, but would not be integrated with the search business as it is today. The way that shopping ads are displayed may also be slightly redesigned.

In June, EU regulators fined Google a record 2.4 billion euros ($2.7 billion), the largest doled out by Brussels for a monopoly abuse case, following a seven-year-long investigation.

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

Google, which makes most of its money from advertising, has argued that the European Commission’s theory “just doesn’t fit the reality of how most people shop online.”

“They reach merchant websites in many different ways: via general search engines, specialist search services, merchant platforms, social media sites, and online ads served by various companies,” Kent Walker, Google’s general counsel, said in a blog post.

Europe is continuing to investigate two other charges, including whether the Android mobile operating system is being used to promote other Google products at an unfair disadvantage to rivals.


— CNBC’s Karen Gilchrist and Reuters contributed to this report.

Anita Balakrishnan

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