Google loses appeal against $2.3bn fine for ‘ad fixing’

Image copyright Reuters Image caption Google received a $2.8 billion fine by the European Commission for unfairly favouring its own shopping service Google has lost an appeal against a $2.8bn (£2.3bn) fine imposed by…

Google loses appeal against $2.3bn fine for 'ad fixing'

Image copyright Reuters Image caption Google received a $2.8 billion fine by the European Commission for unfairly favouring its own shopping service

Google has lost an appeal against a $2.8bn (£2.3bn) fine imposed by the European Commission for favouring its own shopping service.

The Commission said Google’s changes to its shopping service were not significant enough.

Google can appeal to the European Court of Justice but is unlikely to do so because of the wide-ranging effect of the ruling.

It may also now face more regulatory pressure from other European countries.

What has Google done?

In 2016, the Commission – a European Union authority – found that Google’s search engine had given a powerful advantage to its own shopping service.

It also alleged that the company had blocked other services from appearing.

Those concerns were upheld when the European Court of Justice announced its ruling on the issue of restrictive contractual terms back in June.

What’s happened?

The Commission has made multiple attempts to convince Google to change the way it displays search results in the past three years.

They include a proposal in August 2016 and more recently, a proposal in June 2018 – both of which fell on deaf ears.

The Commission had warned Google it would fine the company if it did not change its practices.

Image copyright Getty Images Image caption Google has had a rocky relationship with the European Commission

What does the ruling mean?

Commissioner Margrethe Vestager, who is in charge of competition policy, said the judgement was “the end of an era for Google”.

“I hope this decisive ruling will be the start of an era of equal treatment for all across the EU,” she said.

“More information will now be displayed which is useful to consumers and facilitates competition.”

Google has said that while it does think the ruling is a step towards ensuring “stronger competition in the market”, it is disappointed by the decision.

It said in a statement that it wanted to be “a good partner” to its users and “we will now review the Commission’s decision and consider our next steps”.

At the time of the fine, the UK’s technology minister Matt Hancock said he hoped the ruling would send a message that “unfair, illegal practices will not be tolerated in the tech sector”.

“We want a European tech sector that isn’t just more competitive but which also embraces a better culture of openness and scrutiny,” he said.

What are the other issues?

The Commission had decided to fine Google in a broader context.

The company received a stinging rebuke in July for its treatment of rival services in its Android operating system.

The commission accused Google of using Android to boost its shopping service at the expense of shopping apps. It said the search engine could have allowed retailers to display results such as its own shopping comparison services, to which users then tend to link.

In that case, the Commission said Google was also guilty of using Android to keep rival search engines off its devices, preventing consumers from having a choice as to the services they were using.

The Commission also announced in September that it would review its approval of Google’s acquisition of YouTube – given because of concerns it would give the firm too much power over the internet.

Image copyright Getty Images Image caption The EU complained that Google search results favoured its own shopping service

What’s next?

The fines may still be contested.

An EU spokesman said: “As soon as we have been made aware of this decision we will seek to contact Google.

“We will contact all affected parties and will take the necessary steps as soon as possible.”

Were other countries happy?

Several UK politicians welcomed the ruling.

“Google is now in a position to make friends and enemies and it cannot take it either way. There is no defence for squeezing rivals and restricting competition so severely and what has changed today is that the Commission has imposed a penalty and has acted,” Tom Watson, deputy leader of the opposition Labour Party, said.

“It is time the UK took charge of our digital future and made sure we are in no doubt of our regulatory priorities”.

The Liberal Democrat MP Tom Brake said: “The case had a global impact and it is now up to the UK Government to take charge of what the European Commission has done.”

Leave a Comment