Google is hit with $1.7 BILLION fine by EU regulators for blocking advertising rivals – the tech giant’s third punishment in two years

• Google has been fined $1.68bn for abusing its role in online advertising 
• EU’s competition commissioner found Google prevented companies using its AdSense product from displaying search advertisements from its competitors 
• In 2018, Google was fined $5bn for anti-competitive behavior related to Android
• In 2017, fined $2.84bn in a case involving its online shopping search results

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European Union regulators have hit Google with a $1.68 billion (1.49 billion euro/£1.28billion) fine for or blocking rival online search advertisers.  

It is the third multi-billion dollar EU antitrust penalty for Google’s parenting company Alphabet in just two years.

The European Commission, which said the fine accounted for 1.29 percent of Google’s turnover in 2018, said in a statement that the anti-competitive practices had lasted a decade.  

Google has been fined $1.68 billion (1.49 billion euro/£1,28billion) for preventing companies using its AdSense product from displaying search advertisements from its competitors

The EU’s competition commissioner, Margrethe Vestager, announced the results of the long-running probe at a news conference in Brussels on Wednesday.

‘Today’s decision is about how Google abused its dominance to stop websites using brokers other than the AdSense platform,’ Vestager said.

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The commission found that Google and its parent company, Alphabet, breached EU antitrust rules by imposing restrictive clauses in contracts with websites that used AdSense, preventing Google rivals from placing their ads on these sites.

WHAT IS ADSENSE AND HOW IS GOOGLE ALLEGED TO HAVE MISUSED IT?

AdSense is a program that allows website publishers to display advertisements on their sites, targeted to their audience and content. 

The ads shown by the program, used by millions of websites, are managed by Google. 

Today’s EU case concerned AdSense for Search, which placed a Google search bar on the website in question, then used any searches made through it to tailor the content of adverts that users were shown. 

For example, if a user searched for ‘shoes’, they would be shown articles about shoes as well as adverts for shoes.

But Google also made publishers sign contracts which initially forbid them from using a rival search engine on the same site, and later forced them to make Google’s search the most prominent used on the site.

Google also required publishers to reserve the most profitable advertising spaces for adverts they supplied, and forced them to seek written approval any time they wanted to change the way rival adverts were displayed 

The EU found these restrictions stifled innovation and denied rivals the chance to compete. 

Google ‘prevented its rivals from having a chance to innovate and to compete in the market on their merits,’ Vestager said. 

‘Advertisers and website owners, they had less choice and likely faced higher prices that would be passed on to consumers.’

Last year Vestager hit the company with a record $5bn (£3.8bn / €4.3bn) fine following an investigation into its Android operating system. 

In 2017, she slapped Google with a $2.84bn (£2.1bn / €2.42bn) fine in a case involving its online shopping search results. 

Shortly after the fine was announced, Google said it has made and will continue to make a number of changes to address EU antitrust regulators’ concerns.

‘We’ve always agreed that healthy, thriving markets are in everyone’s interest,’ Kent Walker, senior vice-president of global affairs, said in a statement.

‘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,’ he continued.

He did not comment specifically on the European Commission’s $1.7bn fine handed down today.

EU Commissioner for Competition Margrethe Vestager, from Denmark, speaks at a news conference on the concurrence case with Google online search advertising, at the European Commission in Brussels, Belgium on Wednesday

The European Commission opened the most recent case against Google in 2016, accusing the search engine of preventing third parties using its AdSense product from displaying search advertisements from Google’s competitors. 

In response to the investigation, Google changed the conditions in its AdSense contracts with large third parties, giving them more leeway to display competing search ads.

The AdSense case may not be the end of Google’s EU antitrust woes.

EU antitrust enforcers have asked Google’s rivals if it unfairly demotes local search competitors, according to a questionnaire seen by Reuters, a move which could lead to a fourth case.

Online mapping services and others could also soon be in the spotlight.

WHAT ANTITRUST CASES HAS GOOGLE FACED IN EUROPE?

July, 18 2018 – EU antitrust regulators hand down a $5 billion (£3.8bn / €4.3bn) fine to Google after a three-year long investigation.

June 27, 2017 – EU fines Google $2.84 billion (£2.1bn / €2.42bn) for thwarting rivals of shopping comparison websites.

July 14, 2016 – EU sets out another charge against Google’s shopping service. It also accuses the company of preventing third parties using its Adsense product from displaying search advertisements from Google’s competitors – a third case against the company.

April 20, 2016 – EU sends a charge sheet to Google outlining the company’s anti-competitive practices with regard to Android smartphone makers and apps makers.

April 15, 2015 – EU charges Google with blocking competitors of its shopping service.

Sept 2014 – Joaquin Almunia says he will not be able to wrap up the Google case before his mandate ends in October.

May 2014 – Joaquin Almunia, European Competition Commissioner at that time, says feedback from complainants will be crucial to determining whether he accepts Google’s concessions.

Feb 5, 2014 – Google improves its concessions related to online search.

2013 – Lobbying group FairSearch files a complaint about Google’s Android business practices to the European Commission.

April 25, 2013 – EU seeks feedback from rivals and users to Google’s concessions.

April 3, 2013 – Google offers concessions related to online search and its AdSense advertising network to address EU competition concerns, without admitting wrongdoing.

Nov 30, 2010 – European Commission opens investigation into allegations that Google has abused its dominant position in online searches following 18 complaints.

Nov 3, 2009 – British price comparison site Foundem complains about Google’s online search to the European Commission.

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