Google Fined $1.7 Billion by E.U. for Unfair Advertising Rules

0
75

LONDON — European authorities on Wednesday fined Google 1.5 billion euros for antitrust violations in the online advertising market, continuing its efforts to rein in the world’s biggest technology companies.

The fine, worth about $1.7 billion, is the third against Google by the European Union since 2017, reinforcing the region’s position as the world’s most aggressive watchdog of an industry with an increasingly powerful role in society and the global economy. The regulators said Google had violated antitrust rules by imposing unfair terms on companies that used its search bar on their websites in Europe.

Europe’s regulatory approach was once criticized as unfairly focusing on technology companies from the United States, but is now viewed as a potential global model as governments question the influence of Silicon Valley. Europe is at the forefront of a broad debate about the role of tech platforms like Apple, Amazon, Facebook and Google, and whether their size and power hurt competition.

With the announcement on Wednesday, the European fines against Google total roughly 8.2 billion euros, or $9.3 billion. But the bloc has not received any of the money yet; Google is appealing the earlier decisions, and is mulling whether to appeal the most recent ruling.

“Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anticompetitive contractual restrictions on third-party websites,” Margrethe Vestager, Europe’s top antitrust watchdog, said in a statement. “This is illegal under E.U. antitrust rules.”

The fine centers on contracts that license the use of Google’s search bar on websites run by newspapers, blogs, travel services and other companies. European regulators said the operators of the third-party websites using Google’s search bar had been required to display a disproportionate number of text ads from Google’s own advertising services over competing digital advertising companies.

The practice, regulators said, undercut competitors, such as Microsoft and Yahoo, that were trying to challenge Google in search.

“There was no reason for Google to include these restrictive clauses in its contracts, except to keep its rivals out of the market,” Ms. Vestager said at a news conference in Brussels. She said the ruling covered 2006 to 2016, when Google stopped the practices.

Europe’s actions against Silicon Valley are influencing policy debates around the world, but some critics question the overall effectiveness of the penalties.

The European Union spent a decade investigating Google, a slow and deliberate process, during which the company’s business and power continued to grow. Annual revenue at Google’s parent company, Alphabet, reached $137 billion last year, compared with $22 billion a decade earlier. On Wednesday, Google shares rose 2 percent.

The Google cases highlight a larger question policymakers face in overseeing the digital economy.

“As it becomes increasingly clear that antitrust fines or after-the-fact remedies are not enough to bring vibrant competition to the market, governments will need to move to deeper tech sector regulation to remedy problems,” said Gene Kimmelman, a former antitrust official in the Justice Department who is now president of Public Knowledge, a consumer advocacy group. He suggested rules preventing tech platforms like Google from favoring their own services.

In the United States, where there has been limited regulation of tech companies, Senator Elizabeth Warren, Democrat of Massachusetts, has made breaking up Google and other tech giants a priority in her presidential campaign. This week, Representative David Cicilline, Democrat of Rhode Island and chairman of the House Subcommittee on Antitrust, Commercial and Administrative Law, called for a federal antitrust investigation of Facebook.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Enable Google Transliteration.(To type in English, press Ctrl+g)