European Commission hits Google with $1.7 bn antitrust fine

This is the third time the EC slaps anti-trust penalties on Google. The latest penalty takes the EC fine on Google over the last three years to $9.3 billion. 

Announcing this at a press conference this morning, EU antitrust commissioner Margrethe Vestager said Google had abused its dominant position by forcing customers of its AdSense business to sign contracts stating they would not accept advertising from rival search engines. 

“The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate,” said Vestager.

The EU had last year fined Google a record €4.3 billion for abusing its market dominance in mobile, and €2.4 billion the year before for manipulating shopping search results. With the new penalty, Google’s total EU antitrust fines now stand at €8.2 billion ($9.3 billion).

Google is currently appealing its earlier penalties.

Google, however, has actively worked with the European Commission to change its AdSense policies after the EU announced its case in 2016.

The policy under scrutiny dates back to 2006. Then, Google started selling customers its AdSense for search product. This let companies like retailers and newspapers place a Google search box on their website. When visitors used the search box, Google showed them ads and split the commission with the website’s owners.

But, Google also made customers sign contracts forbidding them from including rival search engines on their sites alongside Google’s own. 

In 2009, Google allowed the inclusion of rival search engines as long as Google’s was more prominent. In 2016, around the time the EU announced its case, the company removed these terms altogether.

In a press statement, Google’s SVP of global affairs, Kent Walker, said: “We’ve always agreed that healthy, thriving markets are in everyone’s interest. We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.”

AdSense has been a steady revenue earner for the company. However, according to Bloomberg, AdSense contributed less than 20 per cent of the company’s income in 2015 and that has declined ever since.

During the press conference this morning, commissioner Vestager pointed to Google’s earlier responses to other antitrust fines, adding that in the case regarding manipulation of shopping search results, Vestager said the changes Google made after the EU’s case increased the visibility of rivals from 6 per cent of search results to 40 per cent.

Vestager also noted that in response to the antitrust case made against Android, Google has decided this week to give users a choice about the browser and search engine they use on their phones (rather than simply pre-installing Google’s own services).

“We’ve seen in the past that a choice screen can be an effective way to promote user choice,” said Vestager. “It is welcome that Google is stepping up its effort and we will watch closely to see how the choice-screen mechanism evolves.”

Vestager also mentioned the search market for jobs and local listings as new areas of scrutiny.

“We keep getting complaints from people who are concerned about how these markets work, so we will keep doing our job,” said Vestager. “For me, the most important thing here is to enable user choice.”