EU Fines Google $3.5 Billion Over Adtech Practices

European Commission Fines Google €2.95 Billion

The European Commission has issued a substantial fine of €2.95 billion (approximately $3.5 billion) against Google this week.

This penalty stems from a finding that Google violated European Union antitrust rules. The core issue involves the preferential treatment given to Google’s own advertising services.

Details of the Antitrust Violation

Specifically, the commission determined that Google “abused” its leading market positions. This abuse manifested in favoring its ad exchange, AdX, within both its publisher ad server and its ad-buying tools.

Google is now required to rectify these practices within 60 days. This includes ending self-preferencing and implementing measures to eliminate inherent conflicts of interest throughout the adtech supply chain.

Commission’s Stance and Expectations

Teresa Ribera, the commission’s executive vice president, emphasized the need for a “serious remedy” from Google. She stated that failure to comply will result in “strong remedies” being imposed.

Ribera underscored that digital markets should prioritize fairness and trust for users. Public intervention is necessary when dominant companies exploit their power.

Google’s Response

A Google spokesperson communicated to The Wall Street Journal that the company intends to appeal the commission’s decision.

The spokesperson asserted that offering services for both ad buyers and sellers is not inherently anticompetitive, and that the market currently offers more alternatives than ever before.

Delay in Announcement

The announcement of the fine was reportedly delayed from its initial date of September 1st. This delay was attributed to ongoing negotiations between the European Union and the United States regarding a potential trade agreement.

Context of the Fine

This fine represents the EU’s second-largest antitrust penalty to date, following a $5 billion fine levied against Google in 2018.

Criticism of the decision extended beyond Google itself. Former U.S. president Donald Trump voiced concerns about fines and taxes imposed on American tech companies, including Apple.

Trump’s Reaction and Potential Action

Trump threatened to initiate a Section 301 proceeding to counteract what he deemed “unfair penalties” charged to American companies.

He hosted a dinner with tech executives, including Google CEO Sundar Pichai and co-founder Sergey Brin, where Trump’s policies, particularly concerning AI, were praised.

Antitrust Developments in the United States

Concurrently, Google experienced a partial antitrust victory in the United States.

While a federal judge previously ruled that Google illegally maintained a monopoly in online search, the proposed remedies were significantly less severe than those sought by the Justice Department. The Justice Department had suggested forcing Google to sell Chrome and potentially Android.