EU hits Google with third antitrust fine | Nairalaw

Google has been hit with a new antitrust fine from the European
Union totaling €1.5 billion.

In a press conference this morning, EU antitrust commissioner
Margrethe Vestager said that the tech giant had abused its dominant
position by forcing customers of its AdSense business to sign
contracts stating they would not accept advertising from rival
search engines. Said Vestager: “The misconduct lasted over 10 years
and denied other companies the possibility to compete on the merits
and to innovate.”

The fine is the third major penalty the EU has levied against
the tech giant in as many years, and closes its last open probe of
the firm. Google was fined a record €4.3 billion last year for
abusing its market dominance in mobile, and €2.4 billion the year
before that for manipulating shopping search results. Google is
currently appealing both cases.

With the new penalty, Google’s total EU antitrust bill now
stands at €8.2 billion ($9.3 billion). Today’s fine was lower than
the previous two as Google actively worked with the European
Commission to change its AdSense policies after the EU announced
its case in 2016.

The policy under scrutiny dates back to 2006. Then, Google
started selling customers its AdSense for Search product. This let
companies like retailers and newspapers place a Google search box
on their website. When visitors used the search box, Google showed
them ads and split the commission with the website’s owners.

But, Google also made customers sign contracts forbidding them
from including rival search engines on their sites alongside
Google’s own. In 2009, Google allowed the inclusion of rival search
engines as long as Google’s was more prominent. In 2016, around the
time the EU announced its case, the company removed these terms
altogether.

In a press statement, Google’s SVP of global affairs, Kent
Walker, said: “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. Over
the next few months, we’ll be making further updates to give more
visibility to rivals in Europe.”

Google’s climb-down reflects, in part, AdSense’s diminishing
importance for the firm. The business was a steady earner, but
never a major component of the company’s revenue. According to
Bloomberg, AdSense contributed less than 20 percent of the
company’s income in 2015 and has declined ever since. “If you look
at the annual reports, AdSense is less and less relevant,”
Bloomberg Intelligence analyst Aitor Ortiz told the
publication.

During the press conference this morning, commissioner Vestager
also offered updates on Google’s responses to its other antitrust
fines. For example, with regards to its manipulation of shopping
search results, Vestager said that changes Google made after the
EU’s case increased the visibility of rivals from 6 percent of
search results to 40 percent.

Vestager also noted that in response to the antitrust case made
against Android, Google has decided this week to give users a
choice about the browser and search engine they use on their phones
(rather than simply pre-installing Google’s own services).

“We’ve seen in the past that a choice screen can be an effective
way to promote user choice,” said Vestager. “It is welcome that
Google is stepping up its effort and we will watch closely to see
how the choice-screen mechanism evolves.”

Although today’s fine brings an end to EU’s current trilogy of
open probes, the organization is still looking at a number of other
areas of Google’s business and could open new cases in future.
Vestager mentioned the search market for jobs and local listings as
areas of scrutiny.

“We keep getting complaints from people who are concerned about
how these markets work, so we will keep doing our job,” said
Vestager. “For me, the most important thing here is to enable user
choice.”