Author Topic: Google Fined $1.7 Billion for Anti-Competitive Practices in Online Advertising  (Read 336 times)

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Google was fined €1.494.459.000 ($1.698.064.094) or 1.29% of Google's 2018 turnover for abusing its market dominance to block rival advertising companies from displaying search ads on publisher search results pages says a European Commission statement published today.

As explained by the European Commission, Google added so-called "exclusivity clauses" in contracts during 2006, prohibiting publishers from displaying competitors' search adverts within search results, forcing them to only display Google search ads delivered through the AdSense for Search online search advertising intermediation platform.

Three years later, starting with March 2009, the search giant replaced "exclusivity clauses with so-called 'Premium Placement' clauses" which would "to reserve the most profitable space on their search results pages for Google's adverts and request a minimum number of Google adverts."

This way, Google blocked competitors from placing their adverts on the most clicked and visible parts of publishers' websites, effectively removing them from visitors' view.

Also during March 2009, Google added new clauses to contracts requiring publishers to ask for "written approval from Google before making changes to the way in which any rival adverts were displayed," allowing the Alphabet unit to "control how attractive, and therefore clicked on, competing search adverts could be."

To summarize the European Commission's findings, using contract clauses introduced in publisher contracts over time, Google removed rivals' search ads from search results pages, reserved the best ad spots for its own search adverts, and controlled how their rivals' search ads looked when they were eventually displayed.

As detailed within the Commission's press release:

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Based on a broad range of evidence, the Commission found that Google's conduct harmed competition and consumers, and stifled innovation. Google's rivals were unable to grow and offer alternative online search advertising intermediation services to those of Google. As a result, owners of websites had limited options for monetizing space on these websites and were forced to rely almost solely on Google.
This is not the first time the European Commission fined Google for abusing its market dominance. In June 2017, EU's competition watchdog imposed a record €4.34 billion ($5.04 billion) fine on Google for "for illegal practices regarding Android mobile devices to strengthen the dominance of Google's search engine."

Also, during July 2018, Google received a €2.42 billion ($2.72 billion) penalty for preventing competitors' from competing in the online search comparison shopping market by abusing its search engine dominance.

According to the Commission, Google had "a market share above 70% from 2006 to 2016" in online search advertising intermediation within the European Economic Area (EEA), while in 2016 the search giant "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."

Competition Policy Commissioner Margrethe Vestager said that:

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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 Commissioner also published a more detailed statement regarding the Commission's decision to fine Google €1.49 billion for breaking the EU antitrust rules by abusing its market dominance.

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