The European Commission has hit Google with a €1.49 billion antitrust fine for imposing restrictive contract terms on third-party websites using its AdSense search boxes. The penalty marks the search giant’s third major European regulatory fine, following previous actions over mobile and shopping practices.
Google has faced its third major antitrust penalty in Europe after the company was ordered to pay a €1.49 billion fine—equivalent to $1.69 billion—for abusing its dominant position in online search advertising. The European Commission said Wednesday morning that Google had for a decade illegally forced sites using the search box to give Google ads the greatest prominence on their results pages. The penalty addresses contractual rules enforced on websites utilizing AdSense for Search boxes to broker ad revenue, with Google acting as the broker.
Contractual Restrictions on Third-Party Websites
Regulatory scrutiny centered on how Google managed third-party publishers between 2006 and 2016. According to findings from the case, the company illegally required websites using its search boxes to grant Google ads the highest visibility on their results pages. Furthermore, the company also made its customers ask for its approval every time they wanted to change how competing search ads were displayed.
“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. This is illegal under EU antitrust rules.”
Margrethe Vestager, Competition Commissioner
European competition authorities argued that 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 that the practices directly harmed European consumers by depriving them of genuine choice and competitive benefits.
Corporate Profitability and Prior European Penalties
The fresh penalty compounds a mounting regulatory bill for Google’s parent company, Alphabet, which makes large amounts of money from advertising—pre-tax profits reached $30.7bn (£23bn) in 2018, up from $12.66bn in 2017.
The new penalty comes on top of a $2.7 billion (reported elsewhere as €2.42bn) fine Google received in 2017 for disadvantaging other comparison-shopping providers on its results pages, and last year’s $5 billion (reported as a record €4.34bn) fine for abusing its position in the Android ecosystem by using its popular Android mobile operating system to block rivals. Google is appealing both those fines, but it’s also scrambling to appease the Commission over the issues that led to the previous penalties.
Product Adjustments and Responses from Industry Figures
Responding to ongoing regulatory pressure, Google executives noted that modifications are already underway. Kent Walker, Google’s global affairs chief, emphasized that the firm aims to support thriving markets in a statement issued after the announcement.
“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.”
Kent Walker, Google global affairs chief
Walker added that over the next few months, the company will be making further updates to give more visibility to rivals in Europe. After all, if Vestager’s office does not think Google has fixed the problems at hand, more fines may follow. Late Tuesday, Walker said in a blog post that the company would ask its European Android users—both old and new—which browser and search apps they would like to use, noting that Google was doing more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones.
