EU Slaps EUR 1.5 Billion Fine on Google for Blocking Rivals through AdSense for Search

EU Slaps EUR 1.5 Billion Fine on Google for Blocking Rivals through AdSense for Search

The fine is for market domination abuse that lasted from 2006 until 2016, according to the European Commission.

The European Commission, the executive of the EU, has imposed a fine of EUR 1.49 billion (USD 1.69 billion) on global tech giant Google for blocking rivals to its AdSense program through the AdSense for Search function.

The new Google fine, the third in 2 years, comes under EU antitrust rules for abusive practices in online advertising.

The European Commission has concluded that Google has “abused its market dominance by imposing a number of restrictive clauses in contracts with third-party websites”.

According to the EC, that prevented Google’s rivals from placing their search adverts on the respective websites.

“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,” said EU Commissioner Margrethe Vestager, who is in charge of competition policy.

“This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate – and consumers the benefits of competition,” Vestager stated, as cited by the EC press service.

Google’s market dominance abuses over the AdSense online advertising program continued from 2006 until 2016, according to the European Commission.

Reacting to the Commission probe into its practices, Google has changed its AdSense contracts with large third parties providing them with greater opportunities to display competing search ads.

Announcing the new Google fine, the European Commission explains dwelled on Google’s strategy for online search advertising intermediation.

It points out that when users use websites’ embedded search function, the website delivers both search results and search adverts, which appear alongside the search result.

“Through AdSense for Search, Google provides these search adverts to owners of “publisher” websites. Google is an intermediary, like an advertising broker, between advertisers and website owners that want to profit from the space around their search results pages. Therefore, AdSense for Search works as an online search advertising intermediation platform,” the Commission said.

It noted further that Google was by far the strongest player in online search advertising intermediation in the European Economic Area (EEA), with a market share above 70% from 2006 to 2016.

In 2016, Google also held market shares generally above 90% in the national markets for general search and above 75% in most of the national markets for online search advertising.

The Commission pointed out that, starting in 2006, Google began to include “exclusivity clauses” in contracts which stopped publishers from placing ads from its rivals such as Microsoft and Yahoo on search pages. The practice continued until modifications in 2016.

The EU already fined Google EUR 2.42 billion back in 2017 for restricting rivals of shopping comparison websites, follwed by a record EUR 4.34 billion fine back in 2018 for blocking rivals in its popular mobile operating system Android – for which the EU was praised by US Senator Elizabeth Warren.

Google owner Alphabet Inc.’s advertising revenue amounted to nearly USD 13 billion in 2017, and nearly USD 31 billion in 2018.

(Banner image: EC Audio-Visual Service)

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