EU hits Google with $1.69bn fine for abusing online ads market

Editor | March 20, 2019 | Middle East | No Comments

European Union regulators have fined Google $1.69bn for blocking rival online search advertisers, hitting the US-based tech giant with a third penalty in two years.

The punishment on Wednesday brought Google’s total tab with the bloc $9.31bn, which amounts to far less than the maximum fine of 10 percent of the company’s annual turnover.

In the latest ruling, Google and parent company Alphabet were found to have breached EU rules by imposing restrictive clauses in contracts with websites that used its AdSense advertising business.

Those clauses prevented competitors from placing their ads on such sites, forcing the websites to reserve the most profitable space on their search results pages for Google’s adverts and a requirement to seek written approval from the internet giant before making changes to the way in which any rival adverts were displayed.

“Google abused its dominance to stop websites using brokers other than the AdSense platform,” Margrethe Vestager, the EU’s competition commissioner, said on Wednesday.

The AdSense advertising case was triggered by a complaint from Microsoft in 2010. Both companies subsequently dropped complaints against each other in 2016.

According to Adrian Mars, a technology journalist, this latest fine was a big hit for the Silicon Valley giant.

“Alphabet Google … made $30.7bn pre-tax profits last year, so they’ve lost a third of that so far in fines,” Mars said.

“They will have to pay it eventually, if they don’t win appeals. I suspect this will be subject to appeal after appeal and drag out for as long as possible,” he added.

Google has abused its market dominance by imposing restrictive clauses in contracts with third-party websites.
It prevented rivals from placing their search adverts on these websites
We fine Google €1.49 billion for breaching #EUantitrust rules. @vestager https://t.co/b7apNlzT4w

— European Commission 🇪🇺 (@EU_Commission) March 20, 2019

Wide range of changes

Google and the EU have been at loggerheads about the monopoly of the former over internet search in Europe.

In July 2018, Google was ordered to pay a record $4.92bn for abusing the dominant position of Android, its smartphone operating system, to help assure the supremacy of its search engine.

A year earlier, it was hit with a $2.75bn penalty for abusing its dominant position by favouring its “Google Shopping” price-comparison service in search results.

Google has appealed both decisions to the European Court of Justice in Luxembourg.

Mars expects amendments to take place soon.

“I think Google will make some amends, to some extent … They said they were grateful for the feedback the European Commission [gave],” Mars told Al Jazeera.

[But, so far] there isn’t anything apart from fines; the next step is governments start making noises about breaking the company up, bringing in European legislation that further limit what they can do, but these things take a long time, and so far the evolution of tech company behaviour happens faster than legislator legislates, and that has been the case for at least the last 20 years,” he added.

Google on Tuesday unveiled a series of tweaks to its European search engine results that would allow certain rivals a more prominent position on results pages.

The change would apply to shopping aggregators, as well as tourist and travel advice sites such as TripAdvisor and Yelp.

We’ve always agreed that healthy, thriving markets are in everyone’s interest. We’re pleased that @EU_Commission recognizes our efforts to comply with its rulings, and the changes we’re making in coming months to give more visibility to rivals in Europe -> https://t.co/EYXvgE8EA4

— Google Europe (@googleeurope) March 20, 2019