The European Commission decided on Wednesday 20 March to impose a fine of €1.494 billion on US giant Google for violating EU competition rules in the search adverts market.
You can't have two without three. After an initial fine of €2.42 billion in June 2017 in the Google Shopping case (see EUROPE 11817/1) and a record €4.34 billion in the Android case in July 2018 (see EUROPE 12065/1), the US giant is again facing the onus of paying a significant sum, this time €1.49 billion. This is the market for search adverts.
“You’re more than welcome to come [to the European Union] and do business. Only, you should compete on the merits”, said Margrethe Vestager, Commissioner for Competition Policy, at a press conference to ask whether US companies were particularly targeted by the competition sanctions.
Today's decision thus sanctions Google's practices that “prevented its rivals from having the chance to innovate and compete on the merits”, she said.
This case concerns research carried out on websites, for example on newspaper websites, blogs or travel sites aggregators. These often have a search function, which, when used by an Internet user, displays search results as well as search adverts.
To provide these contextual ads to website owners, Google uses the AdSense for Search tool. The American giant thus has a role as an intermediary, via AdSense for Search.
Between 2006 and 2016, the Commission found that Google was by far the most powerful player in this market, with a market share of more than 70%.
The institution also points out that Google's competitors in this market, such as Microsoft or Yahoo, cannot sell advertising space on the results pages of Google's search tool, so third party sites are, for them, a significant gateway to develop their business and compete with the US giant.
Between 2006 and 2016, Google provided its advertising intermediation services through individual agreements and the Commission examined “more than 200”, according to Ms Vestager.
The institution first noted that from 2006 onwards, Google had inserted exclusivity clauses in the contracts in question, under which website publishers could not place contextual advertisements from competitors on their search results pages.
Then, from March 2009, the company began replacing these exclusivity clauses with other types of clauses according to which web publishers could not place Google's competitors' search adverts in the most visible and clicked on parts of the websites' search results pages. Also from March 2009, the US giant forced these publishers to have its written consent before changing the way competing ads were displayed.
The Commission considered that more than half of the market, in terms of turnover, had been covered by this type of practice.
On the basis of these facts, the institution concluded that Google had abused its dominant position on this market between 2006 and 2016 by preventing other companies active in this sector from effectively competing with it, which had the effect of harming consumers and hindering innovation. Hence the fine of €1.494 billion.
The Commission adds that the company put an end to the problematic practices after the transmission of a Statement of Objections in July 2016 (see EUROPE 11594/2).
Android and Google Shopping. With regard to the two previous cases concerning Google, Ms Vestager also stated that actions implemented or planned by the company, as well as results, had been seen by the institution as “positive developments”. “We’ll keep monitoring the market”, she added.
Reaction. Google quickly reacted to this decision. “We've always agreed that healthy, thriving markets are in everyone's interest”, its directors said. “Over the next few months, we’ll be making further updates to our products in Europe”, they added. (Original version in French by Lucas Tripoteau)