Google’s PR team was sent scrambling to make its position clear ahead of an expensive ruling in Europe.
On Wednesday, the European Union delivered a $1.69 billion antitrust fine against Google—the third fine that the tech giant has received for interfering with competition.
The latest fine takes the total the company has been fined by the EU competition commission to €8.24bn over the past two years, for abusing its power in markets, ranging from shopping search to mobile phone operating systems.
In 2006, Google added exclusivity clauses to ad contracts with websites and advertisers. “This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages,” the Commission said. Google changed those rules slightly in 2009, but retained approval over publisher’s ads on competing search engines.
Though the commission said that “market dominance is, as such, not illegal under EU antitrust rules,” it determined that Google had taken advantage of its sizeable market share and further used it to restrict competition.
In a press conference this morning, EU antitrust commissioner Margrethe Vestager said that the tech giant had abused its dominant position by forcing customers of its AdSense business to sign contracts stating they would not accept advertising from rival search engines. Said Vestager: “The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate.”
… The duration was reflected in the size of the fine, [Vestager] added. Google profits were nearly $31 billion in 2018.
Prior to the EU antitrust commission’s ruling, Google attempted to get ahead of the story by making several changes to its advertising product and publishing a press release detailing its work to offer consumers more choices.
Just ahead of the Commission’s announcement, Google’s Android OS started asking users to select which browser and search engine they want to use, and not just offer Chrome and Google Search by default. It also created separate licenses for Play, Chrome and Search, so phone makers can offer their own alternatives.
On Tuesday, the company’s senior vice president of global affairs, Kent Walker, wrote in the company’s press release:
For nearly a decade, we’ve been in discussions with the European Commission about the way some of our products work. Throughout this process, we’ve always agreed on one thing一that healthy, thriving markets are in everyone’s interest.
A key characteristic of open and competitive markets一and of Google’s products一is constant change. Every year, we make thousands of changes to our products, spurred by feedback from our partners and our users. Over the last few years, we’ve also made changes一to Google Shopping; to our mobile apps licenses; and to AdSense for Search一in direct response to formal concerns raised by the European Commission.
… We’ve always tried to give people the best and fastest answers一whether direct from Google, or from the wide range of specialist websites and app providers out there today. These latest changes demonstrate our continued commitment to operating in an open and principled way.
This isn’t the first time Google and its parent company, Alphabet, have done damage control surrounding its advertising product after criticism and censure from the EU.
The Alphabet company has previously defended the use of its ad technology, claiming it had been in place since 2006, is now superseded, and is a minor product.
In the fourth quarter of 2018, Google’s core advertising business saw revenue increase 20 percent from the previous quarter to $32.6 billion — the same rate of growth as the last quarter.
The European Commission said between 2006 to 2016, Google was by far the strongest player in online search advertising in the European Economic Area, with a market share above 70 percent.
Wednesday’s antitrust ruling doesn’t mean Google’s PR team can breathe easily, either. Additional crises might surface for the technology company surrounding both its advertising product and other offerings.
The Verge reported:
Although today’s fine brings an end to EU’s current trilogy of open probes, the organization is still looking at a number of other areas of Google’s business and could open new cases in future. Vestager mentioned the search market for jobs and local listings as areas of scrutiny.
“We keep getting complaints from people who are concerned about how these markets work, so we will keep doing our job,” said Vestager. “For me, the most important thing here is to enable user choice.”
How would advise Google to change the conversation? Share your takeaway in the comments.