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European Union fines Google $1.7B for monopolizing online ads

20 March 2019

The announcement is unsurprising, given the European Commission (EC) slapped Google with a record $5 billion fine in July 2018 for stifling browser and search engine competition in the EU. Adsense for Search does not refer to the famous ads above search results but, instead, are ads displayed in "Custom Search" results that can be embedded inside their websites.

The EU's competition commissioner, Margrethe Vestager, announced the results of the long-running probe of Google's AdSense advertising business case at a news conference in Brussels on Wednesday. The commission is keeping an eye on Google muscling into jobs listings and local search.

Following a years-long investigation into Google's shopping services, the European Union fined the company a record $2.7 billion in 2017.

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The EU says that Google abused its dominant position again, this time concerning its AdSense business. As Google is merely keen to avoid accusations of being anticompetitive in Europe, it is only European Android users that will be affected.

In the past few weeks, United States presidential candidate Elizabeth Warren proposed that Google be classified as "platform utilities", meaning that it could not both own the platform and be a participant on it. Google's ad exchange and businesses on the exchange would be split apart, she said, and Google search would have to be spun off. The first one, which involved the company favoring its shopping services in search results, was for €2.4 billion.

She added that 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".

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Kent Walker, SVP of Global Affairs at Google, said in a statement: "We've always agreed that healthy, thriving markets are in everyone's interest".

Google also says it has "changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search", which means phone manufacturers have the freedom to "install any alternative app alongside a Google app".

The European Commission reviewed "hundreds" of Google advertising contracts and found a range of behavior from Google's Ad division that it deemed anti-competitive.

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Freshfields partner Dr Andreas von Bonin said: "Given that this fine is significantly smaller than the previous fine handed out to Google and that the company has already factored in the impact of displaying competitor search ads, it's unlikely it will inflict any lasting damage".

European Union fines Google $1.7B for monopolizing online ads