/Google hit with €1.49bn fine from EU

Google hit with €1.49bn fine from EU

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Alphabet’s Google remains a dominant force in online advertising

Google has been hit with a €1.49bn (£1.28bn) fine from the EU for blocking rival online search advertisers.

It is the third EU fine for the search and advertising giant in two years.

The case accuses Google of abusing its market dominance by restricting third-party rivals from displaying search ads between 2006 and 2016.

In response, Google changed its AdSense contracts with large third parties, giving them more leeway to display competing search ads.

Google owner Alphabet makes large amounts of money from advertising – pre-tax profits reached $30.7bn (£23bn) in 2018, up from $12.66bn in 2017.

“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 anti-trust rules,” said EC commissioner Margrethe Vestager.

Last year, the EU competition authority hit Google with a record €4.34bn fine for using its popular Android mobile operating system to block rivals.

This followed a €2.42bn fine in 2017 for hindering rivals of shopping comparison websites.

AdSense fine

The European Commission said that websites often had an embedded search function.

When a consumer uses this, the website delivers both search results and search adverts, which appear alongside the search result.

Google’s “AdSense for search” product delivers those adverts for website publishers.

The Commission described Google as acting like “an intermediary, like an advertising broker”.

In 2006, Google started to include “exclusivity clauses” in contracts which stopped publishers from placing ads from Google rivals such as Microsoft and Yahoo on search pages, the Commission said.

From 2009, Google started replacing the exclusivity clauses with “premium placement” clauses, which meant publishers had to keep the most profitable space on their search results pages for Google’s adverts and they had to request a minimum number of Google adverts.

Publishers also needed to get written permission from Google before making any changes to how rival ads were displayed, letting Google control “how attractive, and therefore clicked on, competing search adverts could be”, the Commission said.

Between 2006 to 2016, Google had more than 70% of the search intermediation market in the EU. It generally had more than 90% of the search market and more than 75% of the online search advertising market, the Commission added.