EU Slaps Google With $1.7 Billion Fine For AdSense Antitrust Violations

The European Commission is hardly afraid to hand out hefty fines to tech firms, as Google knows as well as any company. In case Google was in need of a reminder, though, European Union regulators smacked the company with a fine of 1.49 billion euros, which is nearly $1.7 billion in US currency.

Google's latest fine is for breaching EU antitrust rules as it relates to search and advertising. According to the Commission, Google abused its market dominance by imposing numerous restrictive clauses in contracts with third-party websites. Those clauses prevented Google's rivals from placing search advertisements on affected websites, the Commission said.

"Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts. Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate - and consumers the benefits of competition," Commissioner Margrethe Vestager said in a statement.

This all relates to Google's AdSense for Search program. The Commission points out that Google was "by far the strongest player in online advertising search intermediation" in Europe, with a market share topping 70 percent from 2006 to 2016. In 2016, Google's share generally topped 90 percent in national markets for general search.

By including restrictive clauses, Google made it difficult for rivals such as Microsoft and Yahoo to sell advertising space in Google's own search engine results pages.

"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," the Commission said.

These findings led to the fine, which takes into account the "duration and gravity of the infringement." It also ranks as the EU's third notable fine imposed on Google. In June of 2017, the EU hammered Google with a $2.7 billion penalty over antitrust concerns related to online search, and the in July 2018, the EU whacked Google with even bigger $5 billion fine over its Android policies. In total, Google has now been fined around $9.4 billion by EU regulators in the past two years.

The latest fine doesn't seem to be affecting investors' confidence in Google. Shares of the search giant are holding steady so far in early morning trading.