Google Loses Appeal Against $4 Billion EU Antitrust Fine

Google lost its appeal against a $4.125 billion (€4.125 billion) antitrust fine by a top European court after the regulators found major violations in how the tech giant operated its Android mobile operating system by restricting rivals four years ago. The court confirmed its decision in a ruling issued this week. The ruling has global repercussions, potentially spurring enforcement from other regulators on similar cases. Although Google challenged the EU antitrust ruling, the decision was largely held by the EU’s General Court, with the fine marginally trimmed from $4.34 billion (€4.34 billion). The amount is a record fine for an antitrust violation. To date, a total of €8.25 billion has been levied by EU regulators on the search engine giant in a trio of investigations. "In order better to reflect the gravity and duration of the infringement, the General Court considers it appropriate however to impose a fine of €4.125 billion euros on Google, its reasoning differing in certain respects from that of the Commission," the judges said. 'Hurt All Constituents': Fresh Concern Over Google's Alleged Ad Auction Rigging EU antitrust regulators have long scrutinized Google’s behavior and are set to roll out a landmark rule—the Digital Markets Act—next year to force tech giants to compete more fairly with rivals. Meanwhile, the Texas-led multistate antitrust lawsuit against Google on its ad-tech stack was advanced in the U.S. court this week, signaling a win for the states, a source previously told Adweek. Although Google won its motion to dismiss the so-called Jedi Blue allegations, major pending allegations, along with speculations of an antitrust lawsuit spearheaded by the Department of Justice further mount pressure on Google. "The fact that in Europe Google lost its appeal against a $4 billion fine within the same 24-hour period [as the Texas-led antitrust ruling] reaffirms it's just a swirl of problems and its only gets more complicated for Google,” said Jason Kint, CEO of trade body Digital Content Next. As the next step, Google can appeal on matters of law to Europe’s highest court, the Court of Justice. However, the tech giant expressed its disappointment in the court’s decision. "We are disappointed that the Court did not annul the decision in full. Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world," a spokesperson told Adweek. Europe’s 2018 Android case In 2018, the EU’s competition watchdog found Google abusing its market monopoly by engaging in anticompetitive contractual obligations with manufacturers of mobile devices using its Android OS and on mobile network operators. Some cases track back to the beginning of 2011. The commission found three types of restrictions in contract clauses by Google, one of which required mobile operators to pre-install Google Search and Chrome browser apps as a condition for licensing Google's Play Store. To that, Google made payments to certain large device manufacturers and mobile network operators on the condition that they exclusively pre-install the Google Search app on their devices. Lastly, the company prevented manufacturers who wished to pre-install Google apps from selling any device that ran alternative versions of Android OS that weren’t approved by Google. Google was ordered to cease the infringements by EU regulators while allowing the company to find a solution. As a remedy, the company offered a selection of search engines for Android users to choose, but moved to a paid auction model for assigning which search engines are in the selection, again penalizing smaller search competitors. Eventually pressurized by the EU, Google switched from the paid auction to a free version for eligible providers last year, placating the court ruling. A global onslaught of antitrust actions In separate EU cases, Google’s ad network AdSense was fined $1.7 billion in 2019, the appeal for which is ongoing. The company was also fined $2.7 billion for demoting rival comparison shopping services in its search result in 2017, for which it lost the appeal, reported the Associated Press. Meanwhile, the European Commissioner for competition Margrethe Vestager is investigating Google’s Jedi Blue ad deal with Meta. Although Jedi Blue was dismissed in the U.S., other major allegations by Google have advanced in the U.S court. These include the tie-in allegation for its anticompetitive effects in the tied market, alleging that Google leveraged its DoubleClick AdExchange business to drive DoubleClick For Publisher business (the two combined in 2018 to form Google Ad Manager). As a result, publishers were obliged to use Google's ad server to access business coming through AdX, ultimately impacting their ad revenue. In another allegation, Google’s Project Bernanke advanced in court for allegedly misleading display-ad auction participants about how Google managed auctions and distributed the proceeds of winning bids. Particularly, the tech giant was accused of underpaying a publisher after a transaction cleared on AdX, with Google secretly retaining a portion of the winning bidder’s payment. “Whether or not Google proactively decides to break up its ad tech business,” said Kint, “the case continuing to move forward could result in structural separation of Google’s ad tech business for sure.” Long Before Lawsuits, Publishers Have Puzzled at Google’s Ad Auction Irregularities

Platforms

Google Loses Appeal in $4 Billion EU Antitrust Fine

This move may increase enforcement on the tech giant from other regulators

Trishla Ostwal

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Trishla Ostwal