Google has successfully overturned a €1.5 billion antitrust fine imposed by the European Commission five years ago. The European General Court annulled the decision, citing errors in how the Commission evaluated the company’s advertising contracts. Specifically, the court found that the Commission failed to prove that Google’s agreements with publishers hindered innovation, allowed the company to maintain its dominant market position, or harmed consumers.
### Background
In 2019, the European Commission fined Google for enforcing restrictive contracts on third-party websites that used its AdSense platform. This practice allegedly prevented these sites from displaying advertisements from competitors alongside Google search results, thus stifling competition from 2006 to 2016. The case was prompted by a complaint from Microsoft.
In a hearing in 2022, Google appealed the fine, arguing that the Commission had committed “material errors of analysis,” as reported by Bloomberg. The case marked the third significant antitrust penalty against the Alphabet-owned company by the EU in the past decade, following earlier fines related to its Android operating system and Google Shopping services.
Jay Stoll, a Google spokesman, stated that the company revised its contracts in 2016 to eliminate the contested clauses, prior to the Commission’s ruling. He noted that the case pertained to a narrow range of text-only search ads on a limited number of publishers’ websites. “We are pleased that the court has recognized errors in the original decision and annulled the fine,” he told Reuters.
### Potential for Appeal
The European Union has the option to appeal the General Court’s ruling, but any appeal would need to be based on legal points brought before the Court of Justice, the EU’s highest court. This is a possibility, particularly given that the General Court upheld many of the EU’s findings. Just last week, the Commission scored victories in two other legal disputes.
In 2018, Google received a €4.34 billion fine from the Commission for abusing its dominant position by pre-installing Google Search on Android devices and is currently in the process of appealing this fine to the European Court of Justice.
### Ongoing Regulatory Scrutiny
Despite the recent court ruling, Google’s challenges with European regulators are not over. Antitrust chief Margrethe Vestager, who has overseen numerous legal battles against the tech giant, will be stepping down later this year. However, investigations into whether Google unfairly favors its own advertising technology are ongoing, with preliminary findings suggesting that a “mandatory divestment” of part of its ad tech business might be necessary to resolve competition concerns.
Another investigation is examining Google’s compliance with the new Digital Markets Act, with regulators claiming that the company is prioritizing its own services over those of competitors in search results, effectively acting as a “gatekeeper.” In response to the enforcement of the Digital Markets Act, Google temporarily removed some search features, such as Google Flights, to allow better access for individual businesses.
Google’s legal challenges extend beyond Europe. Recently, the UK’s Competition and Markets Authority provisionally ruled that the company’s dominance in the ad tech sector adversely affects competition. Google is also appealing a UK court decision from June, which allowed a similar antitrust lawsuit from a group of online publishers to proceed.
In the United States, the Department of Justice and several state Attorneys General launched an antitrust investigation into Google in 2020, alleging that the company has unlawfully used distribution agreements to suppress competition. This investigation is still ongoing. Furthermore, in August, a federal judge ruled that Google holds a monopoly on general search services and text advertisements, constituting a violation of antitrust laws.
