Google Wins Appeal Against EU’s €1.5 Billion Fine for Ad Monopoly Practices

Google has won a legal battle against the European Union (EU), successfully overturning a €1.5 billion ($1.7 billion) fine for hindering competition in the online ad sector. The decision, issued by the EU’s General Court in Luxembourg, provides some respite for the tech giant following a major legal setback just a week earlier.

According to Bloomberg, the court sided with Google’s challenge to the 2019 fine, stating that while regulators were correct in many of their findings, they made critical errors in assessing the duration of Google’s anti-competitive actions. This decision can still be appealed at the EU’s highest court, the European Court of Justice.

The European Commission had originally penalized Google for allegedly blocking competitors such as Yahoo and Microsoft from placing ads on third-party websites. As a dominant player in online advertising, Google was accused of using its AdSense for Search product to prevent rivals from advertising on websites that used Google search boxes. However, Google eliminated these controversial practices in 2016, well before the EU’s final decision.

Per Bloomberg, Wednesday’s ruling marked a setback for the EU’s antitrust authority, led by Margrethe Vestager, who had secured a series of victories against major tech companies in her decade-long campaign. Just last week, Vestager celebrated two significant legal wins: one against Google over a €2.4 billion fine for favoring its own products in search results, and another involving Apple’s €13 billion Irish tax bill.

The AdSense ruling is the final piece of a trilogy of high-profile cases that have shaped Vestager’s legacy as Europe’s top antitrust enforcer. Google’s contracts with websites allegedly restricted these platforms from displaying ads from competitors. This, according to the EU, amounted to a violation of antitrust laws. The watchdog’s €1.5 billion fine targeted the company’s influence over text-based ads on websites like newspapers, blogs, and travel sites.

Judges, however, ruled that the European Commission failed to prove the extent of Google’s alleged abuse, particularly during 2016. The court noted that while it agreed with most of the Commission’s findings, it made mistakes in evaluating the market coverage of the disputed practices during that year. This flaw led to the annulment of the fine.

In a statement, Google expressed satisfaction with the court’s decision, emphasizing that the fine was based on incorrect assessments. “We are pleased that the court has recognized errors in the original decision and annulled the fine,” a Google spokesperson said, adding that the company would closely review the judgment.

Related: Google Knew Publishers Would Resist Ad Sales Changes, According to Internal Documents in Antitrust Trial

Google also reiterated that the case centered on “a very narrow subset of text-only search ads” placed on a limited number of websites and clarified that the relevant contract changes were made in 2016, well before the investigation escalated.

The European Commission, on the other hand, signaled that it would examine the ruling closely and consider its next steps. Vestager’s actions have resulted in Google facing more than €8 billion in fines over the years, and a potential fourth antitrust case focusing on Google’s advertising technology is still under investigation. This ongoing probe could lead to calls for breaking up Google’s adtech business to address competition concerns.

The ruling also comes amid growing scrutiny of Google’s ad practices across the Atlantic. Following the EU’s lead, the U.S. Department of Justice has taken legal action against Google, also advocating for a breakup of its adtech division, with a high-profile trial currently underway in the United States.

Source: Bloomberg