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Google fined 1.49 billion euros for 'abusive' online advertising practices
- Google has been slapped with a 1.49 billion euro fine for advertising-related anti-trust violations.
- The company prohibited rival search advertisers from displaying ads on publishers’ search pages.
- Publishers also needed written approval from Google to make visual changes to rival ads.
Google has been hit with a 1.49 billion euro (~$1.69 billion) fine by the European Commission for breaching EU anti-trust laws. The commission said the Mountain View company had imposed “restrictive clauses” in advertising-related contracts with third-party websites.
In a press release announcing the fine, the European Commission explained that third-party websites often include search functionality on their sites, displaying both search results and search ads. One of the big issues, however, is that Google’s contracts with these websites prohibited rival search advertisers (e.g. Microsoft and Yahoo) from displaying ads on these search pages.
Furthermore, the commission found that, from 2009, Google replaced these exclusivity terms with “premium placement” clauses. These clauses required websites/publishers to reserve the most profitable search page ad spots for Google’s ads and forced them to place orders for a minimum number of Google ads.
Google’s actions “harmed competition”
One of the more worrying findings was that, from 2009, the Mountain View company required publishers to gain written approval from Google before making visual changes to rival ads. “This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be,” read an excerpt of the release.
The European Commission noted that Google discontinued the practices in question several months after the commission issued a statement of objections. The statement is essentially a document sent to concerned parties, notifying them of objections raised against them. This is usually one of the first formal steps in an anti-trust investigation by the EU. But Google’s action wasn’t enough for it to avoid a 1.49 billion euro fine.
“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,” read an excerpt of the commission’s release.
The news comes after Google was fined almost $5 billion in July 2018 for practices relating to pre-installed Google apps on third-party Android phones. The EU took issue with Google’s requirement that Android OEMs bundle the Chrome browser and Google Search app if they want to install Google Play services on their devices.