European Commission lays out €1.49 billion fine on Google for abusive practices in online advertising

Business / Google / Tech
racketeering

According to the European Commission Google has stopped these practices since 2016 when they got involved in the case.

Google’s fight with the European Commission seems to be never-ending as they’ve been fined again this time for abusive practices in its Adsense business. The European Commission has fined Google in the past and the European Parliament has even considered breaking up the company, how that would work I’m not sure of. But we do know that Google has been in this seat multiple times already.

In this case, the European Commission has fined the search giant €1.49 billion (US$1.7 billion) for breaching the EU’s antitrust rules. The European Commission claims Google has abused its position in the market by creating rules and contracts that stifled competition from getting their advertisements on third-party websites. According to the European Commission Google has stopped these practices since 2016 when they got involved in the case.

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. 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. 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.

Margrethe Vestager – Commissioner in charge of competition policy

The Commission says that Google has been the strongest player in online search advertising intermediation with a market share above 70% from 2006 to 2016. In 2016 Google also held market shares generally above 90% in the national markets for general search and above 75% in most of the national markets for online search advertising. In other words, Google basically has a stranglehold on online search and online advertising.

The Commission also claims it is not possible for competitors in online search advertising such as Microsoft and Yahoo to sell advertising space in Google’s own search engine results pages.

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Today’s decision concludes that Google is dominant in the market for online search advertising intermediation in the EEA since at least 2006. This is based in particular on Google’s very high market shares, exceeding 85% for most of the period. The market is also characterized by high barriers to entry. These include very significant initial and ongoing investments required to develop and maintain general search technology, a search advertising platform, and a sufficiently large portfolio of both publishers and advertisers.

European Commission

The entire report is linked below if you’d like to check out the full details and go more in-depth with it.

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 Source: Europa.EU
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