The European Commission has just announced another antitrust fine for Google . The latest fine — $1.49BN — relates to its search ad brokering business, which involves Google selling advertising space related to searches carried out on third party websites.
Speaking at a press conference, EU competition commissioner Margrethe Vestager said the search giant had engaged in illegal practices in order to “cement its dominant market position”.
“Today’s decision is about how Google abused its dominance to stop website’s using brokers other than the AdSense platform,” she said, noting that the Commission looked at more than 200 agreements and found at least one clause that harmed competition.
“There was no reason for Google to include these restrictive clauses in its contracts other than to keep rivals out of the market,” she added.
The Commission found three types of anti-competitive restriction in Google’s contracts — including the company requiring its ads to have premium placement.
Vestager said the size of the fine was calculated based on the revenue Google generated from its AdSense business vs its overall revenue as a company but also factoring in exacerbating factors, such as the length of violations — which in this case the Commission found had gone on for around a decade.
Responding to the Commission’s decision in a statement, Kent Walker, Google’s SVP of Global Affairs 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.”
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It’s the third Commission antitrust penalty for Google, following the $5BN fine for anti-competitive behaviors attached to Android last summer and a $2.7BN penalty for Google Shopping antitrust violations in mid 2017.
In recent years Vestager has also flagged concerns about several other Google products, including travel search, image search and maps. Though no formal probes have yet been announced.
The latest EU antitrust decision against Google relates specifically to Google AdSense ads that appear on third party sites as a result of a search made on those sites.
The Commission made a formal Statement of Objections against AdSense in 2016, when it identified several practices it believed violated antitrust rules after investigating complaints.
Its objections included that Google required exclusivity in AdSense site search deals, mandating that third parties do not source search ads from its competitors; that Google required third parties to take a minimum number of search ads from it, with premium placement for them; and that Google required sites to seek approval from it before making any changes that might involve competing ads.
The Commission noted at the time that exclusivity practices had been in place since 2006, before being gradually replaced by Google from 2009 in most contracts — with the requirement of premium placement/minimum ads and the right for Google to authorise competing ads.
“The Commission is concerned that the practices have artificially reduced choice and stifled innovation in the market throughout the period,” it wrote then. “They have artificially reduced the opportunities for Google’s competitors on this commercially important market, and therefore the ability of third party websites to invest in providing consumers with choice and innovative services.”
You can read more on the background to the AdSense complaint (and Google Shopping) in our report from 2016 here.
Since being hit with a wave of antitrust scrutiny and action in Europe Google has been forced to tweak product and make some changes to its business practices. Though it’s far from clear it’s done enough to stave off further regulatory intervention if the end-goal is to promote effective competition.
Google’s latest Android tweaks — announced just yesterday — attempt to address complaints that its default browser and search settings on the smartphone platform box out competition by preferring its own browser over rival browsers.
In a blog post dated March 19 Google said it will start asking Android users to choose which browser and search apps they wish to use, with the change slated as coming in the next months.
Last fall it also made changes to the licensing terms of Android to allow device makers to unbundle its apps — for a fee.
While in fall 2017 Google tweaked how it displays search results for products in Europe.
Although it was later accused of creating a ‘fake’ price comparison site scheme to create the allusion of a thriving market.
In all these EU antitrust cases complaints against Google have not gone away.
Rather complainants continue to couch the company’s self-styled compliance ‘remedies’ as a joke.
Yet with antitrust and political scrutiny of Google and other tech giants stepping up domestically as well as internationally, any self-serving competition ‘fixes’ are operating on borrowed time.
Moreover figleafs will likely increase pressure for more radical regulatory intervention — such as a break up of Google…
It’s therefore likely no coincidence that — in a more recent browser-related update — the search giant quietly expanded search engine choices in Chrome, adding privacy-focused rival DuckDuckGo’s search engine to the lists of options it promotes to users in more than 60 markets with the latest Chromium stable release, as well as French pro-privacy Qwant as an option in its home market.
This change was welcomed by both DuckDuckGo and Qwant.
Though the latter told us it still recommends its users use Firefox or Brave, rather than Google’s Chrome browser.
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