EU fines Google $1.7B over advertising agreements

The European Union (EU) has hit Google with a third major antitrust penalty in as many years, this time hitting the internet search giant with a $1.7 billion fine over its efforts to shut out competing online ad services.

The European Commission, the EU’s enforcement arm, said Google had been using exclusivity agreements with third-party websites to ensure that its ads reserve the most profitable placements within their sites.

{mosads}“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,” Margrethe Vestager, the EU’s competition commissioner, said in a statement.

“This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate — and consumers the benefits of competition.”

According to the EU, Google stopped the practices in 2016 after a directive from regulators. The decision on Wednesday orders the company not to engage in it again in the future. It also allows competitors and other affected parties to file lawsuits against Google.

Google, which has fought the last two penalties with appeals, didn’t say whether it would challenge Wednesday’s fine but vowed to make further changes to address regulators’ concerns.

“We’ve always agreed that healthy, thriving markets are in everyone’s interest,” Kent Walker, the company’s chief legal officer, said in a statement. “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.”

European regulators have surpassed U.S. authorities as Silicon Valley’s top watchdog.

The EU last year implemented a sweeping set of privacy regulations to rein in websites’ collection and use of personal data and has repeatedly fined and investigated the largest American tech companies.

In the U.S., however, tech giants have largely remained unscathed even in the face of growing anger from policymakers. Tech critics have taken notice and have started pushing for the government to take a stronger regulatory stance on the industry.

Sen. Elizabeth Warren (D-Mass.) has pledged to break up tech giants as part of her 2020 bid for the White House. And this week, Rep. David Cicilline (D-R.I.), who chairs an antitrust subcommittee, called on the Federal Trade Commission to investigate Facebook for potentially abusing its market power.

The latest fine, which the EU says is 1.29 percent of the company’s annual revenue, is smaller than the back-to-back record penalties that the EU issued against Google in 2018 over its bundling of Google services with its Android operating system and in 2017 for elevating its own comparison shopping service over those of rivals.

On the eve of the fine, Google published a blog post highlighting the work that it had done to respond to the EU’s antitrust concerns and announced that it would be making it easier for Android users to choose from competitors’ search and browser apps.

Updated at 9:52 a.m.