The European Commission has fined Google €2.95 billion (about $3.19 billion) for abusing its dominance in online advertising technology. The penalty, announced on Friday, September 11, follows findings that the search giant favored its own services at the expense of rivals, advertisers, and publishers.
The Commission ordered the company to end the practices and submit a plan within 60 days to address conflicts of interest in the adtech supply chain.
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The decision stems from a long-running investigation into how Google operates its advertising technology business.
The Commission concluded that Google abused its market power in two areas — publisher ad servers and programmatic ad buying tools — to give an unfair advantage to its own ad exchange, AdX.
This was done, according to regulators, by allowing AdX to see competitors’ bids in advance and by steering Google’s ad buying tools to favor its exchange over others.
By reinforcing AdX’s position in the adtech ecosystem, the Commission argued, Google was able to charge higher fees, reduce choice, and squeeze publishers’ revenues.
“Today’s decision shows that Google abused its dominant position in adtech harming publishers, advertisers, and consumers. This behavior is illegal under EU antitrust rules. Google must now come forward with a serious remedy to address its conflicts of interest, and if it fails to do so, we will not hesitate to impose strong remedies,” said Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition.
“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. True freedom means a level playing field, where everyone competes on equal terms and citizens have a genuine right to choose,” she added.
Google says it’s innocent
Google naturally entirely rejected the ruling and said it would appeal.
Speaking to the BBC, Lee-Anne Mulholland, Google’s global head of regulatory affairs, said the decision was “wrong” and warned that the measures demanded by Brussels “will hurt thousands of European businesses by making it harder for them to make money.”
The company argued there are more alternatives to its services than ever before, and that offering integrated ad solutions is not anti-competitive.
The fine was calculated under the Commission’s 2006 guidelines, taking into account the duration and gravity of the infringement, as well as Google’s past breaches of competition law.
It is the third time the EU has fined the company for abuse of dominance, following penalties over its shopping comparison service in 2017 and Android practices in 2018.
The case also carries weight internationally. The US Department of Justice has raised similar concerns about Google’s conduct in adtech, with a trial on remedies scheduled to begin later this month.
The EU’s decision could influence the American case, particularly as both focus on whether Google used its position to restrict competition in the ad exchange market.
What do you think about the EU Commission’s fine against Google? Let us know in the comments.
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