As speculated, Google has received its third multi-billion dollar fine from EU antitrust regulators. The fine, which is 1.49 billion euro (USD 1.69 billion) in size, has been levied on the Alphabet-owned company for blocking rival online search advertisers. This fine also marks the third such fine that Google has been slapped with, in past two years.
The commission identified that Google was by far the strongest player in online search advertising intermediation in the European Economic Area (EEA). The company held a market share above 70% from 2006 to 2016. In 2016 Google also held market shares generally above 90% in the national markets for general search and above 75% in most of the national markets for online search advertising.
This thus made it almost impossible for competitors in online search advertising (EU press release mentions the names of Microsoft and Yahoo, which is a bit intriguing) to sell advertising space in Google’s own search engine results pages. The commission also analysed several contracts which Google signs individually with advertisers. The commission revealed:
- Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.
- As of March 2009, Google gradually began replacing the exclusivity clauses with so-called “Premium Placement” clauses. These required publishers to reserve the most profitable space on their search results pages for Google’s adverts and request a minimum number of Google adverts. As a result, Google’s competitorswere prevented from placing their search adverts in the most visible and clicked on parts of the websites’ search results pages.
- As of March 2009, Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed. This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be.
Therefore, third-party websites represent an important entry point for these other suppliers of online search advertising intermediation services to grow their business and try to compete with Google.
Google has been on the receiving end of a slew of multi-billion fines from EU antitrust regulator. The company was slapped with close to $5B Billion in fine last year, for using Android to block rival products. It has also been alleged of promoting its own products via the mobile OS –which commands major dominance in the smartphone OS industry.
In 2017, Google was fined for blocking rival shopping websites when it launched its own attempt at ecommerce. Google provided prominent placement to its own shopping service in the form of “sponsored” results which are placed right near the top of the search page.
Clicking on one of these results took a user straight to Google Shopping. And whenever you would have purchased something, Google makes money. And of course, it might be in your interest to buy the same thing from someplace else. But due to Google’s convoluted search policy, you are redirected to the page where it wants you to go.
Earlier today, just ahead of the scheduled EU antitrust conference, Google announced some new product tweaks. These were aimed at mitigating the bad PR that the company will develop through this fine, though it really is not going to make much of a difference.
Alphabet will surely looking to appeal against this fine as well, but the way EU antitrust body has worked towards cases as big as this, is setting an example globally. The detailed release on the fine levied is present here.
