Google Slapped With $1.7 Billion Fine by EU for ‘Abusive Practices in Online Advertising’

European Commission finds that Google blocked competitors’ ads on third-party websites for a decade

Last Updated: March 20, 2019 @ 7:17 AM

Google has been fined the equivalent of $1.7 billion USD by the E.U. for carrying out what the European Commission called “abusive practices in online advertising.” The Alphabet-owned dominant search engine brand violated E.U. antitrust rules.

“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,” Commissioner Margrethe Vestager, who is in charge of competition policy over there, said on Wednesday. “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.”

Basically, what Vestager’s saying is that Google forced third-party websites to agree to contractual clauses that would prevent the websites from posting ads from the search engine’s competitors.

“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,” the commission published.

“We’ve always agreed that healthy, thriving markets are in everyone’s interest,” Kent Walker, Google’s chief legal officer and SVP 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.”

In 2016, Google ceased what was deemed to be the illegal actions after the commission objected to the practices.

This fine is actually on the lighter end of what Google’s gotten from the European Commission. In June 2017, the commission fined the company €2.42 billion ($2.75 billion USD today) for abusing its dominance as a search engine by giving an illegal advantage to Google’s own comparison shopping service. In July 2018, the commission fined it €4.34 billion ($4.93 billion USD today) for illegal practices regarding Android mobile devices to strengthen the dominance of Google’s search engine.

Shares of Google’s parent company, Alphabet, weren’t impacted much by the fine, at least on Wednesday, with the company’s stock increasing 0.5 percent in early morning trading to $1,208 per share.