General Court dismisses € 1.5B fine from European Commission on Google

The General Court agrees with the European Commission’s findings regarding Google’s AdSense for Search service. However, the Commission failed to take into consideration all relevant circumstances leading up to a fine of approximately € 1.5 billion in 2019. That’s why the Court has annulled the fine.

The case revolves around AdSense for Search, an online service which allows publishers of websites to integrate Google Search on their website. Just like a regular search query in Google Search, AdSense for Search displayed ads. Publishers would receive a part of the revenues that were generated by displaying these ads.

In order to claim these revenues, publishers had to negotiate a ‘Google Service Agreement’ or GSA with Google. GSAs however contained clauses restricting or prohibiting the display of ads from services competing with AdSense for Search.

Over the years, companies like Microsoft, Expedia and Deutsche Telekom lodged a complaint with the European Commission concerning unfair business practices by Google.

In 2019, Brussels ruled that from January 2006 to September 2016 Google’s contracts between the parties contained requirements that harmed competing advertising networks, like Microsoft and Yahoo. Google abused its dominance on the search engine market to force publishers of websites to exclusively use AdSense for Search.

For that the European Commission imposed a fine of € 1,494,459,000 on Google.

On Wednesday, the General Court decided that the Commission’s fine went too far. The presiding judges agreed with Brussels' findings, but argued that the wrong conclusions had been drawn.

According to the judges, the European Commission hadn’t made sufficiently clear that the violations are considered abuse of a dominant position and therefore Google had been violating European law for years. For that reason the General Court decided to annul the Commission’s decision in its entirety, including the € 1.5 billion fine.

“We made changes to our contracts in 2016 to remove the relevant provisions, even before the Commission's decision. We are pleased that the court has recognized errors in the original decision and annulled the fine,” Google said in a statement to Reuters.

The European Commission can appeal the General Court’s decision with the Court of Justice of the European Union. It has two months to decide. A spokesperson told the press agency it would study the judgment and reflect on possible future steps.

The verdict should boost Google’s morale. Just last week the tech company lost a legal fight against the European Court of Justice, which fined Google € 2.42 billion for favoring its own online shopping service Google Shopping.

Executive Vice-President Margrethe Vestager called last week’s ruling “a landmark in the history of regulatory actions against big tech companies”.