A Swedish court has ruled that the search giant favored its own price comparison service in search results, harming Klarna's similar business.

A Swedish court has ruled that Google's parent company, Alphabet (share price up 1.05%), must pay the buy-now-pay-later platform Klarna Group plc $1.97 billion in damages. This follows an antitrust lawsuit brought by Klarna alleging unfair competition, with the court finding in Klarna's favor.

Klarna's price comparison subsidiary, PriceRunner, sued Google in a Swedish court in 2022, accusing the tech giant of giving preferential treatment to its own price comparison service in search results.

Klarna spokesperson Dan Grieves stated, "This ruling will help create a healthier and more competitive market environment for the price comparison industry for goods and services."

In pre-market trading on Wednesday, shares of Klarna Group plc surged nearly 12%, while shares of Alphabet edged slightly higher.

The Stockholm Patent and Market Court on Wednesday upheld parts of PriceRunner's lawsuit while dismissing other claims.

A Google spokesperson responded, saying, "We do not agree with this court's decision and are currently evaluating the details of the case and will consider legal options, including an appeal."

Google stated that it made changes to its shopping ads policies in 2017 and that these changes have driven growth for various price comparison platforms across Europe.