EU Fines Google $1.69 Billion for Advertising Abuses

Posted on March 20, 2019 by Paul Thurrott in Google with 11 Comments

Image credit: Shawn Collins

The European Commission has fined Google $1.69 billion for its illegal behavior in the online advertising market.

“Google is fined €1,49bn for illegal practices in search advertising brokering to cement its dominant market position,” EU Competition Commissioner Margrethe Vestager announced. “They shouldn’t do that – it denied consumers choice, innovative products, and fair prices.”

The fine is Google’s third in the EU, and the third straight time it has been found guilty of abusing EU antitrust laws. It was previously fined $5.1 billion, a record, for using the dominance of Android to illegally undercut rivals. And in 2017, it was fined $2.85 billion for unfairly favoring its own shopping services over those of rivals.

In this case, Google was charged with illegally “cementing its dominance in online search adverts and shielding itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites.”

Google, naturally, objects to this characterization of its monopoly on web advertising.

“We’ve already made a wide range of changes to our products to address the Commission’s concerns,” Google senior vice president Kent Walker said in response. “Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.”

The fines, while massive, won’t hurt Google too much, as is the sole major contributor to the $173 billion in revenues that its parent company Alphabet posted last year. But the firm is still appealing each of the three rulings. And it is making more changes to address all of the complaints.

“We’ve started testing a new [shopping] format that gives direct links to comparison shopping sites, alongside specific product offers from merchants,” Mr. Walker explains. “We’ll do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones [and] will ask users of existing and new Android devices in Europe which browser and search apps they would like to use.

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Comments (11)

11 responses to “EU Fines Google $1.69 Billion for Advertising Abuses”

  1. Chris_Kez

    Another pointless fine; yawn.

  2. rm

    “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.” That speaks volumes to the amount of antitrust behavior that is going on with Google. For them to have to make that many changes to no longer be in violation of antitrust laws shows that being evil is what Google does. Microsoft had only one antitrust violation with the IE browser. Now Google has three guilty rulings each with larger fines than what Microsoft had.

    • locust infested orchard inc

      In reply to RM:

      Based upon the number of antitrust guilty rulings and the fine slapped upon them, it would suggest Google is more than three times more evil than Microsoft ever was.

      Microsoft is now middle-aged (44 years old in two weeks), having left it transgressive behaviour firmly in the past, is now a force of sound reasoning, an ethical tech company, and a socially responsible entity.

      Google on the other hand is a belligerent basketcase that has been given nothing more than a clip around the ear by the European Commission. Following on from the physical violence analogy, what it really needs is a baseball bat-carrying self-styled vigilante treatment.

      • bill_russell

        In reply to locust infested orchard inc:

        Google is still one of my most respected corporations, even if 3x the evil of MS, meaning that MS is also 1x evil, but you believe is ethical and socially responsible, which then means that 1x evil == good, by this logic. Therfore I would say 3x evil isn't too bad. Nobody is perfect.

        As a small startup you start doing normal competitive things to try to succeed, which at a certain point of success switches to illegal and anti-competitive. The EU seems to sit for years and quietly wait for these up and comers and then pounces.

    • wright_is

      In reply to RM:

      Microsoft had several anti-trust violations, but the browser ballot was the only one that was really visible to most people and it was the one the press jumped on to ridicule the whole case.

      The other areas - abuse of licensing position (forcing PC manufacturers to pay for a DOS or, later, Windows license for every PC sold, whether it was sold with an MS OS installed or that of a competitor) or unfair advantages from undocumented APIs - they had to open up their server API documentation to competitors as well.

      Both of those had a much bigger influence on Microsoft's behaviour than the one that the press jumped all over. Silly headlines sell more papers/clicks than sane and sensible ones.

  3. lvthunder

    So the EU is going after another big US based corporation. No surprise there.

    • crfonseca

      In reply to lvthunder:

    • wright_is

      In reply to lvthunder:

      Yes, no surprise, big US corporation ignores international law, and then acts surprised when they are handed big fines.

      For some reason big US, especially Internet based, companies seem to think that what is legal in America is also legal elsewhere in the world, even though the local laws tell them that they are wrong.

      If I go to America, I have to adhere to US laws while I am there. When I was younger, it was legal for me to drink and have sex at home, visiting the USA, I couldn't get a drink, I couldn't have sex. So I stuck to US law for the duration and celebrated when I got back home.

      American business laws are much more lax, especially when it comes to abusing competition and privacy, yet the companies just ignore those minor details, until the fines or public opinion start to really hurt them.

      And it isn't just US companies that get fined, plenty of European conglomerates have landed before the courts over the years for market abuse. It is just the major Silicon Valley firms seem to have a real hard on for trying to flout the law and they get a lot of press when they run flat out into the wall - and then blame the wall for being in their way.

  4. red.radar

    If the EU is saying that the behavior allowed Google to become dominant, what good does a fine do? Sounds like its just a cost of dominance. Do concessions ever work once the damage has been done?

    • wright_is

      In reply to red.radar:

      The argument isn't that the behaviour allowed them to become dominant, it is that their dominace allows them to abuse their position by pushing unfair terms on others and restricting competition, thus having a bad effect on consumer choice.

      If it was just fines, it probably wouldn't work, because the fines are usually aimed at national level companies, so multi-nationals hardly notice - although the fines are starting to increase to levels where companies take notice. But it is also the concessions and sanctions that are needed.

      Some, like the browser ballot, come too late and just look silly, but others do help. It certainly helped that Microsoft couldn't force unfair terms on PC makers - if you sold a PC in the 90s and beginnig of the 2000s, with Novell Netware, Linux, DR-DOS etc. installed, or you sold a PC with no software installed, you still had to pay Microsoft for a DOS or Windows license. There argument was, that people didn't really want NetWare on their server, they would still end up replacing it with MS-DOS!

      The same for documentation and undocumented server APIs, MS were forced to provide competitors with proper documentation.

      Both those measures changed the market, you can now buy PCs with Free-DOS or even Linux for less than a PC with Windows installed. Server software works better and there is more choice these days.

      But all of that was glossed over, because the browser ballot gained most of the headlines and that is what most people think about when they think about the Microsoft case, but it was infact the least significant of the concessions.

  5. dontbe evil

    good, hopefully many more and higher fines are coming

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