On 20 March 2019, the European Commission (the "Commission") announced that it had issued a decision imposing a € 1.49 billion fine on Google for breaching Article 102 of the Treaty on the Functioning of the European Union. According to the Commission, Google abused its dominant position in online advertising by imposing a number of restrictive measures in contracts with third-party websites which prevented Google's rivals from placing their search adverts on those websites.
According to its press release, the Commission found that Google enjoyed a dominant position on the market for online search advertising intermediation. The Commission concluded that this followed from high barriers to entry and Google's very high market share, above 70% from 2006 to 2016, and in fact exceeding 85% for most of the period.
The Commission's decision relates to Google's practices in online advertising. More specifically, websites such as newspaper websites, blogs or travel sites aggregators, considered as "publishers", often have a search function embedded. When a consumer uses this search function, the website delivers both search results and search adverts, which appear alongside the search results.
Through AdSense for Search, Google provides these search adverts to "publishers", which appear alongside the search results. In essence, Google is an intermediary, like an advertising broker, between advertisers and website owners that want to profit from the space around their search results. Therefore, AdSense for Search works as an online search advertising intermediation platform.
Google's provision of online search advertising intermediation services to the most commercially important publishers took place via agreements that were individually negotiated. Starting in 2006, Google included exclusivity clauses in its contracts, which prevented publishers from placing any search ads from Google's competitors on their search results pages.
As of March 2009, Google gradually began replacing the exclusivity clauses with so-called 'Premium Placement' clauses. These required publishers to reserve the most profitable space on their search results pages for Google's ads, and also to request a minimum number of Google ads. As a result, Google's competitors were prevented from placing their search ads in the most visible and clicked-on parts of the websites' search results pages.
In addition, as of March 2009, Google began including clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival ads were displayed, meaning that Google could control how attractive, and therefore clicked-on, competing search ads could be.
The Commission also found that it was not possible for competitors in online search advertising, such as Microsoft and Yahoo, to sell advertising space in Google's own search engine results pages. Therefore, third-party websites represent an important entry point for these other suppliers of online search advertising intermediation services to grow their business and try to compete with Google.
While Google ceased the illegal practices a few months after the Commission issued a Statement of Objections in July 2016, the misconduct allegedly lasted over ten years. The Commission imposed a fine of € 1.49 billion which was calculated in accordance with the Commission's 2006 Guidelines on fines taking into account the duration and gravity of the infringement.
In addition, the decision requires Google, at a minimum, to stop its illegal conduct, to the extent it has not already done so, and to refrain from any measure that has the same or equivalent object or effect.
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