EU Slaps 1.5 Billion Euros Fine on Google for Advertising Practices

Google’s advertising practices in Europe have been a matter of a long drawn out anti-trust case, and today, the tech giant was slapped with a 1.5 Billion Euros ($1.7 billion) fine by the European Union (EU) for blocking ads published by rivals. Google has been in a long-running dispute with the EU’s anti-trust watchdog, and this is the third fine that it has been slapped with in a matter of two years. The case is related to Google’s abuse of its position in the market over the course of a decade from 2006 to 2016, when it blocked third-party rival firms from displaying search advertisements. Following the earlier censure from the EU, Google renegotiated its contracts with the third party rivals and allowed them greater freedom in their Adsense contracts. However, that did not prove to be enough as the EU decided to slap the fine regardless.

Margrethe Vestager, who is the commissioner of the anti-trust watchdog, said,

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 anti-trust rules.

In this regard, it is also important to point out that Google makes a lot of money through their advertising service and it is in its interests to block out rival firms. The profits before taxes from advertising alone stood at $30.7 billion in 2018. In the previous year, it was $12.66 billion.

Following the verdict, Kent Walker, the head of global affairs at the company stated that the company has taken the concerns of the commission on board and are keen to make changes. He said,

 We’ve always agreed that healthy, thriving markets are in everyone’s interest. We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.

Due to Google’s practices, advertisers who were working in the same industry simply could not grow, and the market pretty much became a monopoly. Conversely, those who spend money on advertising had no other option but to go with the services provided by Google, and it soon became a bit of a monopoly, with only one company being the option for everyone. The EU has almost always been tough when it comes to anti-trust issues, and this is perhaps the latest example in its long drawn out battle with Google.

 

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