EU fines Google €1.49bn, citing anti-competitive ad service
The European Commission is fining Google 1.49 billion Euros (1.7 billion dollars) for breaching EU competition rules by abusing its dominant position with its AdSense third-party search advertising service, the bloc announced on Wednesday.
“Google has cemented its dominance in online search adverts and shielded itself from competitive pressure,’’ EU Competition Commissioner Margrethe Vestager said.
Vestager pointed to anti-competitive contractual restrictions that Google imposed on third-party websites.
“This is illegal under EU antitrust rules,” Vestager noted, adding that the misconduct lasted more than a decade and denied other companies the chance to compete on their own merits.
The decision relates to search functions embedded on websites such as newspaper platforms, blogs or online travel aggregators.
When users search such websites, they find search results as well as adverts appearing alongside.
Google’s AdSense serves as an intermediary between advertisers and website owners, allowing advertisers to place ads on these websites.
“Google actively took measures that stymied competitors in the online search advertising market,’’ the commission said, looking at contracts between Google and publishers between 2006 and 2016.
For example, Google first prohibited publishers from placing search ads from competitors on search results pages, and later restricted such search results to less visible, less trafficked parts of websites’ search results.
“These provision led to a vicious circle for Google’s rivals – they were unable to grow and to compete. They had limited options for selling advertising space on those websites and were forced solely to rely on Google ads.
“As a result Google benefited from network effects and became even stronger,’’ Vestager said.
The commission concluded that given Google’s market share in Europe for online search advertising intermediation was 85 per cent or more in those years.
“The commission’s fine of 1.49 billion Euros takes into account the gravity of the infringement and Google’s revenue,’’ the commission said.
It noted that the fine amounts to 1.29 per cent of the firm’s turnover in 2018.
It is the third levy that the EU has slapped on Google, following a fine of 2.42 billion Euros in 2017 and 4.34 billion Euros in 2018, an EU record.
The first addressed Google’s practices in comparison shopping, while the second focused on its use of Android mobile devices to entrench Google’s search engine.