Google hit with $1.7 billion fine for anticompetitive ad practices

Image: Thierry Monasse/Getty Images

The EU is making Google pay for its anti-competitive practices.

On Wednesday, the European Commission Google to pay a huge €1.49 billion antitrust fine (roughly $1.7 billion USD) for “abusive practices in online advertising.”

The Commission determined that Google had engaged in illegal conduct to “cement its dominant market position” with its Adsense program, which had a market share of more than 70 percent from 2006 to 2016 in Europe.

Hundreds of Google’s advertising agreements with major websites were reviewed by the commission, which discovered numerous restrictive clauses that blocked the company’s advertising rivals from competing in the market.

“Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts,” said Commissioner Margrethe Vestager in the statement. “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.” 

Among the Europe Commission’s findings were exclusivity clauses in Google’s contracts which forbade publishers from placing search ads from competitors on search results pages.

Around three years later, Google would adopt what the Commission refers to as a “relaxed exclusivity strategy.” The search giant would replace the exclusivity clauses with “Premium Placement” clauses that required its publishing partners to save its most profitable ad space on search result pages for Google.

The Commission also discovered clauses that required publishers to obtain approval from Google if they wished to change how ads from the search company’s competitors were displayed on their website.

“This is illegal under EU antitrust rules,” stated Vestager. “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.”

Google stopped its illegal advertising practices in July 2016 after the Commission issued a decision which required that the search giant do so.

This is Google’s third antitrust fine levied by the European Commission. In 2017, the company was fined for using its search engine to promote its own shopping comparison tool above competitors. In 2018, Google was fined for using Android’s mobile dominance to force its search engine on smartphone manufacturers.

All three fines were determined using the revenue Google generated from the illegal practice and the company’s overall revenue, as well as other factors such as “the length of the violation.”

The previous $5 billion fine was record-setting for Google. However, it the company when its quarterly earnings came around.

Google has now been fined around €8.2 billion ($9.3 billion USD) by Europe in total since 2017.