The European Commission has concluded its third probe into Google's business practices by whacking it with a €1.49bn fine. The third investigation dealt with advertising broker services that Brussels said foreclosed competition and raised prices for website operators.
Google stopped these practices in July 2016 – after the commission issued a Statement of Objections.
The $1.7bn (£1.3bn) fine, which goes into escrow pending the inevitable appeal, is smaller than the record €4.34bn fine imposed last July on Google for abuse of its Android platform. The first of the three investigations – to do with Google's abuse of its search dominance to push its comparison shopping service – is being resolved by Google's own remedy. Competition commissioner Margrethe Vestager made moderately encouraging noises about that remedy at a press conference today. She cited data indicating that traffic to rival comparison shopping sites appeared to be increasing.
"Google abused its dominance to stop websites using brokers other than its own AdSense platform," Vestager explained at a press conference this morning. "The commission investigated 200 tailored agreements that contained at least one type of restriction that harmed competition.
"There was no reason for Google to include these restrictions except to keep rivals out. These prevented rivals competing. Advertisers and website owners have less choice and likely face higher prices that are likely passed on to consumers."
The third @Google case: @Google is fined €1,49bn for illegal practices in search advertising brokering to cement its dominant market position. They shouldn’t do that - it denied consumers choice, innovative products and fair prices.— Margrethe Vestager (@vestager) March 20, 2019
These were exclusivity provisions for AdSense from 2006 and premium placement provisions from 2009, which guaranteed Google-served ads the best spot on a page.
The much-criticised "Shopping remedy" now delivers 40 per cent of clicks to "rival" sites from the Shopping Unit on Google's front page – up from 6 per cent last summer. Critics including lead complainant Foundem argued the "rivals" aren't really rivals, they're pseudo-companies created by Google's ad agency partners through a scheme called Comparison Shopping Services, or CSS.
Vestager also cautiously welcomed the "browser choice" proposal Google made this week, offering to give users a choice of browser and default search engine on their Android device.
One questioner asked if Vestager was simply persecuting successful US tech companies.
"I don't think the truck companies see it like that," she responded, referring to the then-record fine imposed on a cartel of continental auto makers who colluded to fix prices.
It's about how you do business in Europe, she said: "You should compete on merits."
Vestager could have cited her decision to block the proposed Siemens-Alstom rail merger – the two had argued they needed to pool their resources to compete with the $35bn-per-year income of China's CRRC (the two European rail companies combined have a turnover of less than half of CRRC, the world's biggest trainmaker).
It isn't all over. The commission is keeping an eye on Google muscling into jobs listings and local search. The 2014 College of Commissioners dissolves this year; Vestager is expected to run for president of the next commission, a post which earned incumbent Jean-Claude Juncker €306,655 this year.
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. 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."
Michael Weber, chairman of Initiative for a Competitive Online Marketplace (ICOMP), told The Register: "Advertisers and subsequently consumers pay Google/Alphabet billions of profits. Google's abuse of dominance in the field of third-party search ads is only one of many advertising forms where the search monopolist tips the balance to its unfair advantage.
"The large fine today, which took years of investigation to reach, is only minuscule compared to the big picture and will have little effect. Meanwhile, competitors have withered or died.
"It's time for the EU and governments around the world to step in and address the underlying wrong: disallow the tying or bundling of Google with web browsers and mobile operating systems; enable users to easily find, see and choose Google's competitors on all desktop and mobile devices; separate the Google search business from its myriad of other services such as YouTube, Gmail, Android, Maps, Local, Travel, Shopping and so on; reevaluate or undo each passed Google/Alphabet merger and acquisition such as DoubleClick, Waze and many more; put an end to the commercial exploitation of citizens' privacy; and reinvest the antitrust fines levied directly into European Commission antitrust resources and staff to more swiftly investigate and effectively deter future violations." ®