Google fined €1.5 billion by EU for restricting ad competitors

Google fined €1.5 billion by EU for restricting ad competitors

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While Google has seen little regulation in countries like the United States, the European Commission has launched a number of antitrust investigations against the Mountain View tech giant. Investigations seem to be increasing over the years with some resulting in major fines and changes to the software in those countries. The latest fine comes in at €1.5 billion (~$1.7 billion) and is because of “exclusivity clauses” in its contracts dating back to 2006. The company had a 70% search engine market share back then and that has increased to over 90% as of 2016.

Antitrust laws prevent companies that dominate a certain market from actively pushing out competitors by leveraging their current dominance. Google ended up facing the largest fine in EU history for imposing “illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.” As a result, Android devices sold in Europe will ask the user which browser and search provider they will use.

This time, the issue is with websites who signed a contract with Google to put a search box on their website. This is called AdSense for Search and Google began signing contracts including these “exclusivity clauses” with various retailers and newspapers. Google would share part of the revenue generated from ads for users that used the search box. Over time, these clauses turned into what the European Commission calls “Premium Placement” clauses which required publishers to reserve the most profitable space on their search results pages for Google’s ads.

This practice continued through 2009 as Google then required publishers to seek written approval from Google before making any changes to the way in which any rival adverts were displayed. The commission says that the €1.5 billion fine takes account of the duration and gravity of the infringement. With this new fine in place, that puts their total fines against Google at €8.2 billion ($9.3 billion).

Source: European Commission