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Europe: And groundhog day - another fine in the billions for Google

Third penalty in billions
After the penalty due to abuse of the market-dominating position of Google search engine in 2017 as well as the fine due to illegal practices on Android mobile devices in July 2018, the EU Commission imposed another fine against Google and/or its parent group Alphabet on 20 March 2019 – this time in connection with the product AdSense for Search. Google was ordered to pay a fine of EUR 1.49 billion. 

Adsense for search
Via AdSense for Search Google brokers advertisements to owners of websites (publisher) that operate a search function on their website and want to use the areas around their search results commercially. Google is thus acting as a broker of search engine advertising.

Cartel violations
In the relevant period – between 2006 and 2016 – Google had a dominant market position of over 90% market share in the EEA space in the market for brokers of search engine advertising.

Starting in 2006, Google prevented publishers from placing advertisements of competitors on their search results by adopting exclusivity clauses into the contracts.

Little by little, starting in 2009, these exclusivity clauses were replaced by clauses about the so-called “premium placement”. These clauses obligated publishers to reserve the most visible and most frequently clicked locations on their search results pages for Google and to place a minimum number of Google ads.

In addition, from 2009, Google adopted clauses into contracts with the publishers according to which the publisher's right to change the search engine advertising to Google competitors was dependent on the approval of Google. Google could therefore influence which advertisements of competitors were displayed and how often they were clicked.

By this practice other companies were prevented from competing with Google in the market for brokering search engine advertising. Google therefore misused its market-dominating position in this market.

Impact
In July 2016, the Commission demanded Google stop the unlawful conduct, whereupon Google terminated the practices that violated cartel law.

Persons and companies that are affected by the anti-competitive behaviour (competitors of Google and possibly also publishers) have the possibility to file lawsuits for damages against Google before the courts of the member states.

Authors: Christina Hummer & Eva Niel