The European Union announced on Wednesday (20) a fine of $ 1.7 billion to Google for abusive practices related to advertising displayed on third-party sites. The decision, once again, is one of the antitrust regulatory bodies of economic and political union, which has been working hand in hand with technology companies in order to curb abusive market practices.
The new decision, which represents the third fine to be paid by Google in the Old Continent, is related to the use of the company’s search tools on third-party sites, with it asking for priority of its own ads over rivals if partner vehicles opted by the tool. For the authorities of the European Union, it is an unfair action aimed at undermining the competition and privileging the solutions themselves in an artificial manner, in addition to being illegal under the laws of the bloc.
In the view of commissioner Margrethe Vestager, Google has used illegal practices to cement its position as a leader in the digital advertising market in Europe, occupying a share of more than 70% of the industry. According to her, preference and exclusivity contracts were not even necessary in an ecosystem already dominated by the company, but it nevertheless adopted restrictive measures that hurt free competition.
More than 200 contracts and advertising agreements were analyzed by regulators, who found instances of infringement in several of them. The cases expand from 2006 to 2016 and, in the view of the authorities, undermined the power of innovation and competition of rivals, who often found themselves without room to act as publishers were tied by the giant. In one of the cases cited, the requirement was for the company’s written approval to display an advertisement provided by a rival, with the right to scrutinize details such as positioning, font size, and even colors used.
For Vestager, the result of so many clauses was the creation of a vicious circle that limited the options of the sites and forced them to go through bureaucratic procedures to advertise ads of competitors, which ended up limiting the options of space for this. So, either because they were not able to move forward with the proposals, the sites ended up relying solely on Google to do so, further solidifying their presence in the industry.
The company, in a statement, abided by the regulators’ decision and said that the practices found in the research are no longer used by the company since 2016. Google also said that free and healthy markets are “in everyone’s interest” and that changes were made even before the action of the authorities. Further changes in terms, in favor of a more open environment, should be announced in the coming weeks.
Sequence of fault
The fine is high, but it is not even close to the record holder. Last year, the European Union penalized Google for $ 5.1 billion by installing its own applications on mobile phones with the Android operating system, a practice that was seen by the block as a way to force users to use browsers, messengers and other company software, without regard to competition. The value led to a change in the practices of the giant, which announced this week that it will create more open alternatives in the operating system.
The fine of $ 2.7 billion was also considered high because Google, in response to user surveys, prioritized the results of its own shopping service, Shopping, over competing marketplaces. Once again, changes have taken place that has led the European Union to become a bastion of market-related inquiries and antitrust disputes against technology companies.
And the heavy hand continues to fall on the segment, even more so in the last two years, when tax issues also came into the regulars’ sights. The Apple, for example, has already been penalized for duty imposed on Ireland as the Amazon goes through an investigation similar to Google for allegedly favoring products in the stock itself above those sold by marketplace partners. Facebook is also facing investigation for violation of the privacy of its users.