Google has successfully overturned a €1.5 billion antitrust fine imposed on it by the European Commission five years ago. Judges at the European General Court overturned the decision because the Commission had made errors in its assessment of the company's advertising contracts.
Specifically, the Commission had not shown that Google's contracts with publishers had been likely to deter innovation, help the company maintain its dominant position and harm consumers as a result. Despite upholding most of the EU's findings, this factor meant that it could not conclude that Google breached competition rules.
Chronology of events
In 2019, the Commission fined Google for imposing restrictive contracts on third-party websites using its AdSense platform, preventing them from displaying competitors' ads alongside Google search results and stifling competition between 2006 and 2016. This was initially triggered by a complaint from Microsoft.
According to Bloomberg, Google has appealed the fine, saying the Commission was guilty of “material errors of analysis” at a hearing in 2022. This is the third major EU antitrust penalty imposed against the Alphabet-owned company in the past decade, following earlier fines related to Android and Google Shopping.
Google spokesman Jay Stoll said today that the company changed its contracts in 2016 to remove the relevant provisions, prior to the Commission's decision, and that the case only affected a narrow subset of text-only search ads placed on a limited number of publisher websites.
“We are pleased that the court has acknowledged errors in the original decision and quashed the fine,” he told Reuters.
The EU can appeal the General Court's decision, but it would have to do so on points of law before the bloc's highest court, the Court of Justice. It may well do so, given that the General Court agreed with many of its findings and, last week, it won two other legal battles:
The Commission fined Google €4.34 billion for abusing its dominance by pre-installing Google Search on Android devices in 2018, but has since appealed to the European Court of Justice.
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Google's regulatory disputes in the EU, UK and US are far from over
This won't be the last time the search giant hears from European regulators, even though antitrust chief Margrethe Vestager, who led many of the legal disputes, resigned later this year.
An investigation is currently underway to determine whether Google favors its own ad tech services, but a preliminary finding last year indicated that a “mandatory divestment” of part of its ad tech business would be the only way to address competition concerns.
Another EU investigation into Google’s compliance with the new Digital Markets Act is also underway. Regulators say the tech giant is promoting its own services above those of third parties in search results and is therefore “controlling access.” In March, Google temporarily removed some search widgets, such as Google Flights, to allow greater access to individual companies in response to the DMA coming into force.
Google’s legal battles are not limited to the EU. Earlier this month, the UK’s Competition and Markets Authority provisionally ruled that the tech giant’s dominance in the ad tech market is harmful to competitors. Google is also seeking to appeal a UK court decision from June, which allowed a similar antitrust lawsuit brought by a collective of online publishers to proceed to trial.
The U.S. Department of Justice and state attorneys general launched an antitrust investigation in 2020, alleging that Google “has unlawfully used distribution agreements to thwart competition.” That investigation is ongoing. Additionally, in August, a federal judge ruled that the tech company has a monopoly on general search services and text ads and has violated antitrust law.
