Google has been fined by the European Commission for alleged illegal practices in regards to its advertising policy and methods.  The company is accused of breaching EU anti-trust laws between 2006 and 2016 by using its position as a search engine to hide or curtail competing companies.

European Commissioner for Competition Margrethe Vestager said  “Google has engaged in illegal practices when it comes to their search advertising brokering in order to cement its dominant market position,”.

This is the third such fine in the companies history in recent years. Fines totalling almost $7 billion have been placed against the company. These earlier fines related to mobile phone manufacturers using Android to drive traffic to Google and a further fine relating to their comparison shopping service.

The latest fine is closely linked to Googles Adsense service. They are accused of using their dominant position to hide rivals appearing in online searches, thus breaching the antitrust law.

According to the commission google has had over 85% share in online searches since 2006 and used this position to include what it called “ exclusivity” and “premium” placement clauses in its advertising contracts. Which ultimately barred rivals from appearing in the best advertising spots.

The fine is equal to 1.29% of Google’s turnover in 2018. The commission stated that Google may also be liable to civil cases by rivals who were harmed by its illegal practices.

Ms Vestager insinuated that this might not be the last fines placed against Google. The commission is now set to investigate Googles practices in regards to the jobs search market and the local search market.

She did, however, note the positive changes taken by Google in response to the commission’s findings. She also noted the swift changes following both the Android and sales comparisons findings.

Android case

In response to the Android case, Google announced that it would be doing “more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones”.

“This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.”

Investigation

The investigation into the commission findings came about as a result of a complaint lodged by Microsoft in 2010.

The methods used by Google ceased in 2016 and the fine is only related to the period between 2006 and 2016. As a result, as long as Google takes no further action the commission will seek not further fines against the company.

During this period publishers were stopped from placing adverts of competitors on their results page. This meant that some of the most profitable advertising space was left to Google. This ultimately forced competitors to pay exuberant advertising fees or become lost online.

The commission said that “Google’s practices covered over half the market by turnover throughout most of the period,”. “Google’s rivals were not able to compete on the merits, either because there was an outright prohibition for them to appear on publisher websites or because Google reserved for itself by far the most valuable commercial space on those websites, while at the same time controlling how rival search adverts could appear.”

Googles response

In a statement, the company said: “We’ve always agreed that healthy, thriving markets are in everyone’s interest. 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.”

Precedents

Ultimately policy changes are required to ensure such monopolies over competition and advertising does not continue throughout the EU.

This ruling follows a similar line of fines and investigations into tech companies throughout the EU. This includes a large fine placed against Apple last year.

These investigations while not directly affecting Ireland, but are signs of the EU’s wariness of these tech companies in the EU and how they operate. The Irish government has come under scrutiny in the past few months for their reliance on these tech giants and support of some of their operations and procedures in the EU.

The Apple fine in September 2018 was a particularly difficult time for Irish/EU relations. Thankfully this latest finding is placed solely against Google and its management. But as we have seen, further investigations and findings are likely to occur.