Google is splitting up search and shopping to avoid huge fines in Europe

Google will partition off its price-comparison service, Google Shopping, from its search advertising business, in a bid to appease EU regulators and avoid potential tens of millions in fines.

The tech giant will create a separate unit for Google Shopping, requiring it to bid against competitors for Google search ads. The proposed changes would only affect Google search results in Europe. The news was first reported by Bloomberg, and was confirmed independently to VICE News by a source familiar with the matter.

In June, Google was fined a record $2.7 billion for abusing its dominant position in the market and illegally favoring its own shopping services over rivals. The EU gave Google 90 days to change the way it operates and level the playing field for all comparison websites.

The remedy that Google is putting forward — effectively having its Shopping unit bid via auction against other ad buyers that aren’t owned by Google — has faced intense scrutiny from regulators in the past; competitors instead want Google to completely break apart its search and price comparison businesses into separate companies.

READ: Meet the woman behind Google’s $2.7 billion fine

The deadline was coming Thursday: If Google didn’t change its practices, it would face additional daily fines equal to 5 percent of its parent company Alphabet’s global daily revenue, or about $12 million a day. Google disagreed with the commission’s decision at the time and officially appealed it earlier this month.

“What Google has done is illegal under EU antitrust rules,” Europe’s competition commissioner, Margrethe Vestager, said at the time. “It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

At the end of August, the European Commission confirmed it had received Google’s proposals for amending its practices to comply with the region’s rules but did not disclose what measures it was suggesting.

“It is Google’s sole responsibility to ensure compliance with the Commission’s antitrust decision,” the European Commission said in a statement to VICE News. “The Commission’s role is to monitor Google’s compliance.”

This tracks with what Vestager said in an interview last week, that the commission’s job is not to “approve” how Google tries to comply with the fine. Instead, if Google competitors “are unhappy” and Google’s proposed fix “doesn’t work, then we will start investigating” — with the possibility of back-dating fines.

Google’s competitors, meanwhile, have expressed dismay at the kind of solution that Google is readying.

“We will reserve final judgement until we have seen the details of Google’s proposal, but it is difficult to imagine how Google could devise an auction mechanism that would not inflict significant additional consumer harm,” wrote the co-creators of Foundem, a European shopping site whose 2009 complaint helped lead to the fine issued earlier this year, on Sept. 18.

Google declined to comment on the Bloomberg report, and Commission spokesperson Yizhou Ren said that “we do not comment on such rumors in the press.”