EU Fines Google $1.7 Billion for Illegal Misuse of Market Dominance

Once again, the European Commission has fined Google. This time, the commission ordered the search engine giant to pay €1.49 billion or roughly $1.7 billion USD for violating EU antitrust rules.

This is the third time that Google received a fine for breaching the antitrust law. In 2017, the company received a hefty €2.42 billion fine for giving an advantage to its own comparison shopping service. Last year, Google was again fined €4.34 billion for its illegal practices regarding Android mobile devices.

According to a statement released by the commission, Google was penalized for its “abusive practices in online advertising.”

Commissioner Margrethe Vestager who is in charge of competition policy said:

“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.”

Google’s Misuse of Market Dominance

For years, Google has been using its AdSense for Search to help publishers monetize their website spaces. Google acts as an intermediary between advertisers and publishers through AdSense for Search which works as an online search advertising intermediation platform.

According to the commission’s report, Google is currently the leading company when it comes to online search advertising intermediation in the EU. The company allegedly owns over 90 percent of market shares for general search and above 75 percent of online search advertising in the national market.

Google’s competitors in online search advertising like Yahoo and Microsoft are not allowed to sell advertising spaces in Google’s search engine results pages. Because of this setup, Google’s competitors need third-party websites to earn and compete with the search engine giant.

During its investigation, the commission reportedly found hundreds of agreements between Google and some of the most important publishers online. The documents gathered by the commission include contracts with exclusivity clauses prohibiting publishers from placing any search adverts from competitors on Google’s search results pages.

The commission deemed Google’s practices as an abuse of its market dominance in the online search advertising intermediation market. While market dominance is not entirely illegal as per the EU antitrust rules, companies who occupy dominant positions in the market are prohibited from using their position to restrict their competitors.

Read More: Google Fined $57 Million For Violating New GDPR Law