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Google fined 1,5 billion euro for abusive online ad practices

By EDRi · March 27, 2019

On 20 March, the European Commission imposed yet another massive fine, 1,5 billion euro, on Google. The Commission Directorate-General for Competition stated that the data company has abused its dominant position in the online advertising market by imposing restrictive contracts with third-party websites that prevented rivals from placing their search adverts on these websites.

Competition Commissioner Margrethe Vestager said that “Google has cemented its dominance in online search adverts and shielded itself from competitive pressure”. According to her findings, Google’s misconduct lasted over ten years and prevented other companies from competing in the ad market.

The fine is imposed for the way Google uses its “AdSense for Search” product, which delivers online ads to large third-party websites such as newspapers and travel sites embedding Google Search into their online presence. Embedding Google search took place via agreements, according to the Commission’s press release. Vestager’s team says they have “reviewed hundreds of such agreements in the course of its investigation”. What they found is quite alarming: Apparently, as of 2006, Google’s agreements prohibited publishers from placing search ads from competitors on their search result pages. This was later replaced with a clause reserving the most valuable ad space to Google ads and requiring any changes that publishers wanted to make be pre-approved by Google.

Google hasn’t denied the charges. In a press statement, Senior Vice President of Global Affairs, Kent Walker, said: “We’ve always agreed that healthy, thriving markets are in everyone’s interest. We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.”

Although Google ceased those practices a few months after the Commission issued a so-called statement of objections in July 2016, the EU authority still decided to impose this fine that represents 1,29 % of Google’s turnover in 2018. The fine follows two previous decisions by the Commission to impose fines of 4,3 billion euro in 2018 and 2,4 billion euro in 2017 for the abuse of dominant positions in the mobile and shopping search. Google is currently appealing both decisions in court.

Fines such as this one are paid into the general EU budget and will be deducted from next year’s Member State contributions to the EU budget. The fines therefore co-finance operations of the EU. The Commission’s Directorate-General for Competition is probably the only part of the EU administration that regularly makes more money than it costs.

European Commission Press release: Antitrust: Commission fines Google €1.49 billion for abusive practices in online advertising (20.03.2019)

Google hit with €1.5 billion antitrust fine by EU (20.03.2019)

(Contribution by Jan Penfrat, EDRi)