EU fines Google surprise $2.3b in antitrust case

The EU has hit Google with a fine of €1.49 billion for blocking rival online search advertisers.
European Commissioner for Competition Margrethe Vestager speaking to the media yesterday at the European Commission headquarters.
European Commissioner for Competition Margrethe Vestager speaking to the media yesterday at the European Commission headquarters.PHOTO: REUTERS

BRUSSELS • Alphabet's Google was fined a bigger-than-expected €1.49 billion (S$2.3 billion) by the European Union for thwarting advertising rivals in what is likely EU antitrust chief Margrethe Vestager's third and final attack on the United States tech giant.

It brings the total that Google has been ordered to pay to €8.2 billion in EU antitrust probes.

Google is making efforts to avoid more fines linked to two older cases, and is trying to stop potential new investigations into local and job search services.

Yesterday's case focused on Google's role as an advertising broker for websites, targeting exclusivity agreements for online ads with its AdSense for Search product.

The service places text advertising on websites, including retailers, telecommunications operators and newspapers.

The problematic contracts were all dropped by 2016, when the EU escalated the investigation.

AdSense contributed less than 20 per cent of Google's total ad revenue in 2015, a percentage which has declined steadily since 2010.

"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," Ms Vestager said in an e-mail.

"This is illegal under EU antitrust rules."

Google has made and will make a number of changes to address EU antitrust regulators' concerns that it has unfairly promoted its shopping service and hindered rivals of its Android smartphone operating system, a senior executive said yesterday.

"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," said Mr Kent Walker, Google's senior vice-president of global affairs.

"Over the next few months, we'll be making further updates to give more visibility to rivals in Europe."

He did not comment specifically on the EU fine that had been handed down.

The advertising revenues that fuel profits for Google and Facebook are increasingly coming under antitrust scrutiny, often prompted by complaints from media companies as ad spending shifts to the web.

France's competition authority has flagged the scale of Google's ad business as a potential concern.

Germany started an inquiry last month and Dutch regulators have been looking at how media companies generate ad revenue.

The UK recently signalled plans to start its own inquiry.

In July last year, the commission fined Google €4.3 billion and demanded that it change the way it puts search and web browser apps onto Android mobile devices.

In 2017, Google received a then-record €2.4 billion penalty after regulators accused it of skewing results to thwart smaller shopping search services.

Google has been scathing about the EU probes, claiming that they lack evidence.

The AdSense case cites "just a few complaints to justify broad legal claims," one of the company's top lawyers said in a 2016 blog post.

Regulators said in 2016 that the ad deals "artificially reduced the opportunities for Google's competitors on this commercially important market."

The EU commissioner has rejected claims that she is singling out US tech giants for special treatment, despite a series of high-profile decisions targeting American companies, including Apple and Amazon.com.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on March 21, 2019, with the headline 'EU fines Google surprise $2.3b in antitrust case'. Print Edition | Subscribe