Google fined €1.49bn by EU for advertising violations | Technology

Google has been fined €1.49bn (£1.28bn) by the European commission for abusing its monopoly in online advertising.

The latest fine takes the total the company has been fined by the EU competition commission to €8.24bn over the past two years, for abusing its power in markets, ranging from shopping search to mobile phone operating systems.

Margrethe Vestager, the EU’s competition commissioner, said: “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.”

This latest fine relates to the contracts Google forced businesses to sign if they wanted to use the company’s technology to provide search functions on their own websites. Companies that wanted to use that feature were also able to run adverts against the results, using a feature called AdSense for search. The EU says that Google used the feature to muscle out competitors who may have wanted to offer their own search adverts on internal searches.

In the commission’s report, it says Google pushed three major anti-competitive requirements on companies that used its search technology, of which the Guardian is one. Firstly, it prevented them from running any third-party adverts on the search results page – meaning that if a company was offering a better deal on ad revenue, websites could not use it without losing their entire search function.

In 2009, Google replaced the requirement with another strategy – “relaxed exclusivity” – which allowed rival adverts to be run but controlled how they were placed, preventing them from being on “the most profitable space on their search results pages”.

“Google’s practices covered over half the market by turnover throughout most of the period,” the competition commission said. “Google’s rivals were not able to compete on the merits, either because there was an outright prohibition for them to appear on publisher websites or because Google reserved for itself by far the most valuable commercial space on those websites, while at the same time controlling how rival search adverts could appear.”

Google stopped the practices in question in 2016, meaning that, so long as it does not restart the exclusivity requirements, the fine, which represents 1.29% of its turnover in 2018, should be the end of the matter.

In a statement, the company 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.”

The €1.49bn charge is the smallest of the three EU fines the company has received.

In June 2017, it was fined €2.42bn for pushing its Google Shopping service on to search engine users in a way that harmed the wider price comparison market. A year later, it was fined €4.34bn for illegally tying its Android operating system to a raft of other requirements, preventing handset manufacturers from shipping phones without pre-installing Google’s search and browser apps.

Wednesday’s fine landed on the same day Google announced a capitulation to the EU’s requirements stipulated in that ruling. The company will now offer European Android users a choice over what browser and search engine they use, forcing a selection from both new and existing users.

The policy follows otherrequirements placed upon manufacturers last October, which allowed them to pre-install other search engines and browsers for European usersif they paid Google a fee, rather than using the free version of Android, which the company says is funded by the pre-installation of Search and Chrome.

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