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European Commission fines Google €1.5 billion for anti-competitive practices

Wednesday, 20 March, 2019 - 15:28

The European Commission has imposed a fine of €1.49 billion on the internet search giant Google on Wednesday for abusing the dominant position of its advertising system AdSense, the third multi-billion euro fine in two years.

“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 anti-trust rules,” said Margrethe Vestager, European Commissioner for Competition.

The fine brings to an end an antitrust battle that has lasted for ten years.  The Commission said that between 2006 and 2009 Google abused its ultra-dominant position in the online advertising market to force advertisers to an exclusive use of its Google AdSense advertising platform to ensure visibility on its search engine.

This involved the use of “exclusivity clauses” in contracts which stopped publishers from placing ads from Google rivals such as Microsoft and Yahoo on search pages, the Commission said.

From 2009, Google started replacing the exclusivity clauses with “premium placement” clauses, which meant publishers had to keep the most profitable space on their search results pages for Google’s adverts.

The restrictive clauses “led to a vicious circle”, Ms Vestager said at a press conference.

“Google’s rivals, they were unable to grow, and to compete, and as a result of that, website owners had limited options for selling advertising space on those websites, and were forced solely to rely on Google,” she said.

This is the third fine imposed on Google by the European Commission, amounting to a total of €8.2 billion in less than two years.

Last July, Google was ordered to pay more than €4 billion for abusing the dominance of Android, its free smartphone operating system.

A year earlier, Google had been hit with a fine of €2.42 billion for manipulating the  search results for Google Shopping.

During the press conference, Commissioner Vestager cited the example of Google Shopping as evidence of how previous EU rulings had forced Google to open itself up to competition. Vestager said that the changes Google made in response to the EU’s fine increased the visibility of rivals from six percent of search results to 40 percent.

It is expected that the Alphabet subsidiary will again make changes to its advertising business following today’s ruling.


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