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20 MAR

Europe fines Google €1.49B in third antitrust case

by Politico

Margrethe Vestager has struck again.

Europes competition chief fined Google €1.49 billion Wednesday for unfairly favoring some of its online advertising services over those of rivals, bringing the total penalties imposed by Brussels on the American search giant to over €8 billion.

The latest fine comes as political pressure ratchets up against Google and other tech firms over their perceived dominance of online markets.

Google is already appealing two separate EU antitrust cases related to some of its search products and Android, its mobile operating system.

By levying a new blockbuster penalty against Big Tech, Vestager also reasserted her role as one of the worlds most forceful tech regulators at a time when she is looking to retain a significant role in European politics after her term at the European Commission comes to an end later this year.

The European Commission had already hit Google with two fines before this one | Scott Olson/Getty Images

“Google has cemented its dominance in online search adverts and shielded itself from competitive pressure,” Vestager said on Wednesday. “This is illegal under EU antitrust rules.”

In a statement, Google said it has already made changes to its digital services to address the Commissions latest antitrust charges.

“Over the next few months, well be making further updates to give more visibility to rivals in Europe,” said Kent Walker, the companys senior vice president of global affairs, without giving further specifics.

Googles advertising dominance

The €1.49 billion penalty relates to online advertising that Google ran on third-party websites such as newspapers and online portals, including AOL.de in Germany.

The Commission said the company had imposed unfair restrictions so that rivals could not compete in this area of online advertising, helping Google to protect its dominance in the wider digital advertising market.

In particular, European authorities said that Google did not allow some websites to use rival advertising services if they wanted to include a Google search box on their webpages. The American companys ads were subsequently given prime real estate on sites as part of contractual agreements.

Vestager added that the fine was calculated based on Googles online advertising revenue in Europe, as well as the duration of abuse, which stretched over 10 years to 2016.

Google, Facebook and Amazon are starting to garner regulators attention.

“It reflects the substantial nature of Googles behavior,” the Danish politician told reporters on Wednesday.

The company may still appeal Wednesdays antitrust decision — which would trigger a lengthy legal battle that could end up at the European Court of Justice.

By taking aim at Googles online advertising business — still the engine behind the companys annual $137 billion revenues — the Commission also raises wider questions over Googles responsibility not to abuse its dominance in an industry that funds much of the worlds internet activity. Many digital services are offered for free to consumers and funded via online ads provided by Google.

The powerful positions of Google, Facebook and Amazon are starting to garner regulators attention.

The fine had been calculated based on Googles online advertising revenue in Europe, as well as the duration of abuse, according to Vestager | John Thys/AFP via Getty Images

Earlier this month, the British government asked its national competition authority to review the digital advertising industry, including a potential lack of transparency over who is purchasing ads targeted at British citizens.

France also passed legislation last year aimed at increasing awareness over digital pricing amid concerns that local players could be charged inflated prices for advertising online.

Google and the other tech giants have yet to be accused of anti-competitive practices in the wider digital advertising sector.

Asked if the Commissions latest antitrust fine could affect these national activities, Vestager said that Brussels work would likely inform the regulatory actions taken within national capitals.

Search and Android cases

While Vestager highlighted further competition abuses by Google on Wednesday, she also offered some support for the American search giant over measures it has taken to address previous antitrust cases.

In particular, she referred to Googles efforts to give rivals greater prominence in some of its search products and on Android, its mobile software.

Speaking to reporters, the Danish politician said that around 40 percent of clicks in shopping searches now were directed to Googles rivals, compared to just 6 percent last year. She added that at least one competitor was displayed in 75 percent of the companys current shopping search results versus a mere 30 percent in 2018.

Googles rivals deny that the search engines alteration as part of its 2017 search antitrust charges have improved competition — claims that were mostly dismissed by Vestager.

The Google search page in 2010 | Nicholas Kamm/AFP via Getty Images

In a separate move, Google on Wednesday unveiled further changes to Android to prompt its European users to choose a potential alternative to the companys search and mobile browsers. These updates are aimed at addressing antitrust charges from 2018, which accused Google of forcing phone manufacturers to use some of the companys digital services if they wanted to access its popular app store.

“We see positive developments in the Google shopping and Android case,” Vestager said.

The search giant, though, is not yet out of the woods.

Google is appealing both the shopping and Android antitrust decisions to Europes highest court in cases that are expected to drag on for years. Rivals also continue to push the Commission to take further action against the companys anticompetitive behavior — lobbying that will likely extend into the next Commissions tenure from late 2019.

Vestager also added on Wednesday that officials are continuing to review complaints linked to potential further abuses in how Google treated its rivals in searches linked to both jobs and local listings.

“We keep getting complaints from people who are concerned about how these markets work,” she said.

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