Google hit with €1.49 billion antitrust fine by EU

The third penalty that Europe has levied on the tech giant in less than two years brings the total to €8.25 billion

The third penalty that Europe has levied on the tech giant in less than two years brings the total to €8.25 billion

European Union (EU) authorities have handed down a €1.49 billion (US$1.7 billion) fine to Google for abusing its dominant position in the brokering of online search adverts, according to a statement by the European Commission and a press conference by European Commissioner for Competition Margrethe Vestager on Wednesday.

EU regulators believe that Google hindered competition in the online ad business by dint of “a number of restrictive clauses in contracts with third-party websites which prevented Google’s rivals from placing their search adverts on these websites”.

“Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rule,” said Vestager in the statement.

The penalty has to do with some of Google’s practices in its AdSense for Search service, which delivers search adverts for website publishers, between 2006 and 2016. The ads appear together with search results fetched by Google’s search function, which is often embedded into travel, newspaper, retail and other sites.

Source: European Commission’s statement

Having examined hundreds of Google’s contracts with website publishers, the European Commission found three kinds of antitrust practices on Google’s part: Starting in 2006, Google prevented website publishers from placing search ads from rivals in online search advertising such as Microsoft and Yahoo on the publishers’ search results pages, said the Commission.

Three years later, these ‘exclusivity clauses’ began to be replaced with ‘premium placement clauses’, under which website publishers had to reserve the most visible place on their search results pages for Google adverts. In addition, they had to stick to requirements for a minimum number of Google ads.

Also in 2009, Google began to mandate that website publishers request its approval with any changes to the way competitors’ adverts were shown. This gave Google control over how rival adverts would appear and ultimately how attractive they would be.

“Google ceased the illegal practices a few months after the Commission issued in July 2016 a Statement of Objections concerning this case,” said the Commission.

This is already the third antitrust fine that EU regulators have slapped on Google in two years. In July 2018, Google was fined a record €4.34 billion ($5 billion) for requiring that the manufacturers of Android-powered smartphones pre-install Google’s search app and the Chrome browser into their devices. In June 2017, Google was hit with a €2.42 billion (US$2.7 billion) penalty over violations related to the company’s shopping search comparison service.

The latest penalty takes into considerations the duration and gravity of the violations and was calculated based on Google’s revenues from online search advertising brokering in Europe.

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