Abu Dhabi, UAESaturday 7 December 2019

European Union fines Google €1.49 billion for illegal industry practices

This case brings the total penalties to €8.2bn from EU antitrust probes against the tech giant

EU commissioner for competition, Margrethe Vestager speaks at a news conference on the concurrence case with Google online search advertising, at the European Commission in Brussels. EPA
EU commissioner for competition, Margrethe Vestager speaks at a news conference on the concurrence case with Google online search advertising, at the European Commission in Brussels. EPA

Alphabet’s Google is being fined €1.49 billion (Dh6.21bn) by the European Union for illegal industry practises, EU antitrust chief Margrethe Vestager said on Wednesday.

Google “in search of advertising brokering to cement its dominant market position” has thwarted its advertising rivals, she said.

“They shouldn’t do that - it denied consumers choice, innovative products and fair prices,” Ms Vestager’s wrote on Twitter.

This is the EU antitrust commissioner’s third and final attack on the US tech giant, in a trio of investigations that previously racked up €6.7bn in financial penalties. Google is making efforts to avoid more fines linked to two older cases and is trying to stymie potential new investigations into local and job search services, Bloomberg reported.

Google has now been ordered to pay €8.2bn total in EU antitrust probes. Wednesday’s case focuses on Google’s role as an ad broker for websites, targeting exclusivity agreements for online advertisements with its AdSense for Search product.

That service places text advertising on websites, including retailers, telecommunications operators and newspapers. The problematic contracts were all dropped in 2016, when the EU escalated the investigation. AdSense contributed less than 20 per cent of Google’s total ad revenue in 2015, a percentage which has declined steadily since 2010.

“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," Bloomberg quoted Ms Vestager as saying in an emailed statement. “This is illegal under EU antitrust rules."

The advertising revenues that fuel profits for Google and Facebook are increasingly coming under antitrust scrutiny, often prompted by complaints from media companies as advertising spend shifts to the web. France’s competition authority has flagged the scale of Google’s advertising business as a potential concern. Germany started an inquiry in February and Dutch regulators have been looking at how media companies generate ad revenue. The UK recently signaled it plans to start its own inquiry.

Last July the EU Commission fined the company €4.3bn and demanded that it change the way it puts search and web-browser apps onto Android mobile devices. A year earlier, Google received a then-record €2.4bn penalty after regulators accused it of skewing results to thwart smaller shopping search services.

Google has been scathing about the EU probes, claiming they lack evidence. The AdSense case cites "just a few complaints to justify broad legal claims", one of the company’s top lawyers said in a 2016 blog post.

Regulators said in 2016 that the ad deals "artificially reduced the opportunities for Google’s competitors on this commercially important market".

The EU commissioner has rejected claims she’s singling out US tech giants for special treatment, despite a series of high-profile decisions targeting American companies, including Apple and Amazon, according to Bloomberg.

Updated: March 22, 2019 03:13 AM

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