Home google Google fined another $1.7 billion by EU for ‘abusive’ AdSense publisher contracts

Google fined another $1.7 billion by EU for ‘abusive’ AdSense publisher contracts

Google faces its third significant antitrust fine in the EU. This time the company was penalized 1.49 billion euros ($1.69 billion) for “abusive practices in online advertising” involving publisher contracts surrounding AdSense for search.

The fine “takes account of the duration and gravity of the infringement. . . . [and] has been calculated on the basis of the value of Google’s revenue from online search advertising intermediation in the EEA,” according to the European Commission (EC) statement.

More than $9 billion in fines. Last year Google was fined a record 4.3 billion euros (roughly $5 billion) antitrust fine resulting from Google Play app pre-install contracts with phone makers. And in 2017, Google was fined 2.4 billion euros ($2.7 billion) for favoring its own content in shopping search results.

All three formal antitrust complaints have resulted in heavy fines, a total of 8.2 billion euros ($9.3 billion). Google has appealed both the previous fines and will likely appeal this one.

The “abusive contracts.” The EC said that exclusivity provisions in Google AdWords agreements (“AdSense for Search“) with third-party publishers prohibited them from using competing services and restricted the way publishers were able to display ads from Google’s rivals.

Antitrust commissioner Margrethe Vestager issued the following statement in conjunction with the decision:

“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. 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.”

The EC said that Google’s agreements made it difficult for Microsoft or Yahoo to compete for publishers’ business.

Here come the private lawsuits. Google changed the agreements in 2016 when the formal antitrust complaint was issued. So the disputed conduct has ended. However the EC says that Google may now face civil actions for damages “by any person or business affected by its anti-competitive behaviour.”

Expect a range of lawsuits from publishers and others to take place. Google also faces a potential fourth antitrust case over local search that has not formally been declared.

Why you should care. The EC’s Margrethe Vestager’s term as Europe’s antitrust lead is up this year and she will not likely be reappointed. However, before she goes I would expect a fourth Statement of Objections (formal charges) to be filed against Google in local search that will probably turn into in another big fine. The logic is virtually identical to that in the shopping search case that resulted in a $2.7 billion penalty.

Together, these fines and outcomes put increasing pressure on U.S. officials to take some new action against Google despite the closure of the 2013 FTC antitrust case without significant penalties.

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