Google hit with €1.5bn fine from EU over advertising

Google has been hit with a €1.49bn (£1.28bn) from the EU for blocking rival online search advertisers.

It is the third EU fine for the search and advertising giant in two years.

The case accuses Google of abusing its market dominance by restricting third party rivals from displaying search ads between 2006 and 2016.

In response, Google changed its AdSense contracts with large third parties, giving them more leeway to display competing search ads.

Google owner Alphabet makes large amounts of money from advertising – pre-tax profits reached $30.7bn (£23bn) in 2018, up from $12.66bn in 2017.

“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.

“This is illegal under EU antitrust rules,” said EC commissioner Margrethe Vestager.

Last year, the EU competition authority hit Google with a record €4.34bn fine for using its popular Android mobile operating system to block rivals.

This followed a €2.42bn fine in 2017 for hindering rivals of shopping comparison websites.

Adsense fine

The European Commission said that websites often have an embedded search function.

When a user uses this, the website delivers both search results and search adverts, which appear alongside the search result.

Google’s “Adsense for search” product delivers those adverts for website publishers.

The Commission described Google – which had a 70% market share in online search advertising – as acting like “an intermediary, like an advertising broker.”

In 2006, Google started to include “exclusivity clauses” in contracts which stopped publishers from placing ads from Google rivals such as Microsoft and Yahoo on search pages, the Commission said.