Google fined 1.49 billion euros for disadvantaging rivals on its search platform

Alphabet subsidiary Google has been fined 1.49 billion euros ($2.38 billion) by the European Commission, marking its third large EU antitrust penalty in two years.

Key points:

  • The fine represents 1.29 per cent of Google's 2018 revenue
  • Between 2006 and 2016, prime Google search ad spots were reserved for its services
  • The EU acknowledged that Google was learning from its mistakes

EU Commissioner for Competition Margrethe Vestager did, however, give a cautious welcome to Google's measures to boost competition and give Android users a choice of browsers and search apps, suggesting the company's regulatory woes may be coming to an end.

The commission said the fine amounted to 1.29 per cent of Google's turnover of more than $US136 billion ($190 billion) in 2018.

It added that the case focussed on the company's illegal practices in search ad brokering from 2006 to 2016.

"Today's decision is about how Google abused its dominance to stop websites using brokers other than the AdSense platform," Ms Vestager told a news conference.

She said its actions meant advertisers and website owners had less choice and likely faced higher prices that would then be passed on to consumers.

The case concerned websites, such as newspaper or travel sites, with a search function that produced search results and search ads.

External Link: Tweet: Vestager on latest Google fine

Google's AdSense for Search provided such search advertisements.

The misconduct included stopping publishers from placing any search ads from competitors on their search results pages, forcing them to reserve the most profitable space on these pages for Google's ads, and a requirement to seek written approval from Google before making changes to how rival ads were displayed.

The AdSense advertising case was triggered by a complaint from Microsoft in 2010.

Both companies subsequently dropped complaints against each other in 2016.

EU has fined Google more than 8b euros

Ms Vestager said the EU's decision to fine Google a record 4.34 billion euros was to protect consumers.

Google said it was taking action to comply with EU orders in two previous cases that illustrated abuses of Google's market dominance.

In 2018, Google was fined a record 4.34 billion euros after the commission found that the company gave Android mobile consumers little choice but to use Google's mobile apps, as some manufacturers were coerced into pre-installing Google mobile apps in order to make their product with the Android system.

The EU's first antitrust case came about in 2017 and involved Google's search engine prioritising Google's shopping services over others that were cheaper, which led to a 2.42 billion euro fine.

"We've always agreed that healthy, thriving markets are in everyone's interest," Kent Walker, senior vice-president of global affairs, said in a statement.

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."

External Link: Tweet: Vestager on Google antitrust Android fine

Ms Vestager welcomed the move, saying: "We see positive developments both in the shopping and Android case."

Google's foe, the Initiative for a Competitive Online Marketplace, said regulators should stay vigilant.

"Competitors have withered or died. It's time for the EU and governments around the world to step in and address the underlying wrong," its chairman, Michael Weber, said in a statement.


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