Google has received its third multi-billion-euro fine from the European Union for anti-competitive practices. The company was fined EUR 1.49 billion for abusing its dominance in the search intermediary market with its AdSense for Search product for advertising on third-party websites offering search engines. The Commission said restrictive clauses in the AdSense contracts prevented Google's rivals from placing their search adverts on these websites.
The fine covers the period 2006 to 2016 and is equal to 1.29 percent of Google's revenues in 2018. During the 10-year period, Google was estimated to have an over 70 percent share of the search advertising intermediary market in the EU, where it brokers advertising for other websites offering a search engine. At the same time it had over 90 percent of the online search market and over 75 percent of search advertising.
The company changed its terms and conditions for AdSense after an initial warning from the Commission in 2016. Prior to that it was found to have a number of restrictive clauses in its AdSense contracts that prohibited rivals from building a position in the third-party search advertising market. The Commission noted that third-party websites are an important segment for rivals such as Microsoft and Yahoo, as they are not able to access the main search ads market on Google's own search engine.
Exclusivity clauses
Starting in 2006, Google included exclusivity clauses in its contracts, prohibiting publishers from placing any search adverts from competitors on their search results pages. 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. 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.
The Commission said the clauses constituted an abuse of market dominance by preventing rivals from competing in the online search advertising intermediation market. Google's conduct harmed competition and consumers, and stifled innovation, the Commission added, as Google's rivals were unable to grow and offer alternative services and owners of websites had limited options for monetizing space on these websites and were forced to rely almost solely on Google. Furthermore, Google did not demonstrate that the clauses created any efficiencies capable of justifying its practices.
Monitoring to continue
In a press briefing on the fine, European competition commissioner Margrethe Vestager said this brings to an end the Commission's competition investigations at Google, after the earlier fines of EUR 2.4 billion for abuses in the shopping comparison market and EUR 4.3 billion in the Android apps market. However, she noted that her department continues to receive complaints from the market and will remain vigilant in monitoring Google's compliance with the competition decisions and related changes to its business activities.
