Google has successfully overturned a €1.5 billion antitrust fine it was handed by the European Commission five years ago. Judges at the European General Court annulled the decision because the Commission had made errors in its assessment of the company’s advertising contracts.
Specifically, the Commission had not demonstrated that Google’s contracts with publishers had potentially deterred innovation, helped the company maintain its dominant position, and harmed consumers as a result. Despite upholding most of the EU’s findings, this factor meant it could not conclude that Google violated competition rules.
Timeline of events
In 2019, the Commission fined Google for imposing restrictive contracts on third-party websites using its AdSense platform, preventing them from displaying ads from its competitors next to Google search results and stifling competition between 2006 and 2016. This was initially triggered by a complaint from Microsoft.
Google appealed the fine and claimed the Commission was guilty of “material errors of analysis” in a 2022 hearing, according to Bloomberg. It marked the third major antitrust penalty against the Alphabet-owned company by the EU in the last decade, following earlier fines related to Android and Google Shopping.
Google spokesman Jay Stoll today said that the company changed its contracts in 2016 to remove the relevant provisions, prior to the Commission’s decision, and the case only concerned a narrow subset of text-only search ads placed on a limited number of publishers’ websites.
“We are pleased that the court has recognised errors in the original decision and annulled the fine,” he told Reuters.
The EU can appeal the General Court’s decision, but it would have to be on points of law to the bloc’s top court, the Court of Justice. It may well do, given that the General Court agreed with many of its conclusions and that, just last week, it found success with two other legal battles:
Google was handed a €4.34 billion fine from the Commission for abusing its dominance by pre-installing Google Search into Android devices in 2018 but has since escalated an appeal to the European Court of Justice.
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Google’s regulatory clashes in the EU, UK, and US are far from over
This is not the last the search giant will hear from European regulators, despite antitrust chief Margrethe Vestager, who led many of the legal disputes, stepping down later this year.
An investigation into whether Google favours its own ad technology services is ongoing, but a preliminary finding from last year said that a “mandatory divestment” of part of its ad tech business would be the only way to address competition concerns.
Another EU probe into the way Google’s compliance with the new Digital Markets Act is also ongoing. Regulators say that the tech giant is promoting its own services above third parties’ in search results and therefore is “gatekeeping.” In March, Google temporarily removed some Search widgets, such as Google Flights, to allow more access to individual businesses in response to the DMA coming into force.
Google’s legal battles are not just confined to the EU. Earlier this month, the U.K.’s Competition and Markets Authority provisionally ruled that the tech giant’s dominance in the ad tech market is detrimental to competitors. Google is also seeking to appeal a U.K. court decision from June, which allowed a similar antitrust lawsuit from a collective of online publishers to proceed to trial.
The U.S. Department of Justice and state Attorneys General initiated an antitrust investigation in 2020, alleging Google “has unlawfully used the distribution agreements to thwart competition.” That investigation remains ongoing. Additionally, in August, a federal judge ruled that the tech company holds a monopoly on general search services and text ads and has broken antitrust law.