The European Commission fined Google EUR 1.49 billion for preventing rivals from competing in the online search advertising intermediation market. Google committed this abuse through imposing restrictions on third party “publisher” websites, which had agreed to use Google’s AdSense for Search. These restrictions prevented Google’s rivals, such as Microsoft and Yahoo, from placing their own search advertisements on these websites.
EC fines on Google to date
Yesterday’s fine follows close on the heels of a record fine of EUR 4.34 billion imposed on Google in July 2018 in relation to the Android operating system (see Linklaters alert) and a EUR 2.42 billion fine in June 2017 in relation to comparison shopping services (see Linklaters alert).
This brings the total fines levied upon Google by the EC in the last three years to a staggering EUR 8.25 billion. Commission Vestager commented on this total amount in her press briefing, stating that, even taken together, the combined amount remains below the 10% worldwide sales revenue cap which binds the EC when setting fines in individual cases.
Google’s AdSense platform acts as an intermediary between advertisers and website owners (publishers) for the placement of advertisements on these websites. Each time a user clicks on an advertisement on the search results page, Google and the publisher receive a commission. This is known as search advertising intermediation. The EC found that, in the 2006-2016 period, Google had a market share of more than 70% in online search advertising intermediation. Google was also found to be by far the strongest player in the neighbouring markets for general search (90%) and online search advertising (75%).
The EC found that Google abused its dominant position by imposing exclusivity restrictions on the most important publisher websites in the 2006-2009 period. These restrictions prevented the publisher websites from displaying search advertisements from Google’s online search competitors (such as Microsoft and Yahoo at the time) on their search results page. The EC further found that, from 2009, Google no longer required exclusivity but continued to impose softer restrictions aimed at reserving the best and most valuable spots for Google.
Because of this conduct, the EC found that Google had abused its dominant position in the market for online advertising intermediation, in breach of Article 102 TFEU.
What comes next?
First, Google has already changed its behaviour, following a Statement of Objections issued in 2016. Contrary to the two previous Google cases, it is unlikely that there will be protracted discussions on compliance with yesterday’s decision.
Second, during yesterday’s Q&A at the EC midday press briefing, Commissioner Vestager indicated that the EC continues to receive complaints against Google, for example in job search and local search.
Lastly, Google is already facing follow-on damages actions in relation to the EC’s previous two decisions and may face further claims as a result of this new decision.