Google has to pay a whopping €2.95B over “abusive practices” in online advertising
The European Commission has imposed a €2.95 billion fine for breaching EU antitrust rules by distorting competition in the advertising technology industry.
In June 2021, the European Commission launched a probe into alleged anticompetitive conduct by Google in the online advertising technology sector.
The EU’s executive branch has now concluded that Google has been abusing its dominant position in the online advertising market since at least 2014, which is an infringement of Article 102 of the Treaty on the Functioning of the European Union (TFEU).
It’s like this. Google is a tech company that sells advertisements on its own websites and applications. It also acts like an intermediary between advertisers who want to place their ads online and publishers who supply that space.
According to the European Commission, Google favored its own advertising marketplace, AdX, over those of its competitors. For example, Google informed AdX in advance of the value of the highest bids.
Furthermore, Google allegedly used its own AdX platform almost exclusively through its advertising sales service Google Ads. Since Google Ads is a dominant service in this area, according to the European Commission, this would effectively sideline any competition.
“Today’s decision shows that Google abused its dominant position in adtech harming publishers, advertisers, and consumers. Digital markets exist to serve people and must be grounded in trust and fairness. And when markets fail, public institutions must act to prevent dominant players from abusing their power,” Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, said in a statement.
The European Commission has ordered Google to end all self-preferencing practices and to implement measures to cease its inherent conflicts of interest along the advertising technology supply chain. Google now has 60 days to inform the Commission about how it intends to do so.
Lee-Anne Mulholland, Global Head of Regulatory Affairs at Google, told the BBC that the European Commission’s decision was incorrect and that it would appeal.
“It imposes an unjustified fine and requires changes that will hurt thousands of European businesses by making it harder for them to make money. There's nothing anti-competitive in providing services for ad buyers and sellers, and there are more alternatives to our services than ever before,” she said.
In turn, President Donald Trump called the ruling “very unfair,” adding that his Administration “will NOT allow these discriminatory actions to stand.”
Last week, a Federal Judge ruled that Google won’t have to sell its Chrome web browser and gets to keep its mobile operating system Android.
At the same time, the French data protection authority ordered that Google has to pay a €325 million fine for sending unsolicited advertising emails to Gmail users. Lastly, the tech company lost a class-action lawsuit over privacy and must pay $425 million in damages.