EU hits Google with new €1.49bn fine

EU hits Google with new €1.49bn fine

Google was fined €1.49bn by the EU for thwarting advertising rivals, a penalty that may be EU competition chief Margrethe Vestager’s third and final ruling on the US tech giant.

It brings the total Google has been ordered to pay to €8.2bn in EU competition probes that have run for nearly a decade and taken aim at the company’s popular software for Android phones and searches related to shopping.

Wednesday’s case focuses on Google’s role as an ad broker for websites, targeting exclusivity agreements for online ads with its AdSense for Search product.

That service places text advertising on websites. The problematic contracts were all dropped by 2016 when the EU escalated the investigation.

Google is by far the biggest internet advertising broker, setting up searches on customers’ websites, Ms Vestager said, and that allows it to control how most consumers start shopping.

“It’s an entry point,” Ms Vestager said at a press conference. “By gaining a foothold in advertising brokering,” competitors “could grow their business and then challenge Google in general search advertising,” she said.

The advertising revenues that fuel profits for Google and Facebook are increasingly coming under competition scrutiny, often prompted by complaints from media companies as advertising spend shifts to the web.

France’s competition authority has flagged the scale of Google’s ad business as a potential concern.

Germany started an inquiry in February and Dutch regulators have been looking at how media companies generate ad revenue.

The UK recently signalled it plans to start its own inquiry.

Google has “already made a wide range of changes to our products to address the commission’s concerns”, the company’s senior vice president for global affairs, Kent Walker, said in a statement. “Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe,” he said.

The EU last July fined the company €4.3bn and demanded that it change the way it puts search and web-browser apps onto Android mobile devices.

A year earlier, Google received a then-record €2.4bn penalty after regulators accused it of skewing results to thwart smaller shopping search services.

However, Ms Vestager yesterday gave the company hope it could avoid fresh fines by saying she didn’t see “a non-compliance issue” over how Google is obeying competition orders related to Android and shopping searches.

Bloomberg

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