Google wins a battle for more than 1.5 billion euros from the EU for ad abuse

Google has won a court battle with the European Union over a 1.5 billion euro ($1.7 billion) fine for thwarting online advertising competition, partially offsetting last week’s crushing defeat in a separate ruling over the abuse of its monopoly powers.

Judges at the EU General Court in Luxembourg upheld the appeal of the Alphabet Inc unit. on a fine handed down in 2019, saying regulators were largely correct in their findings but made key mistakes in their investigation into the length of the alleged wrongdoing.

The European Commission has concluded that Google – as the dominant online ad broker – unlawfully prevented rivals such as Yahoo Inc. and Microsoft Corp. to place advertisements on third party websites. Wednesday’s ruling can still be appealed to the block’s higher court, the Court of Justice.

The decision follows two court successes for antitrust chief Margrethe Vestager and her bid to control Silicon Valley. Last week, she won high court victories against Google’s attempt to avoid a €2.4 billion antitrust fine for favoring its own search results for Apple Inc’s products and demand. to avoid a €13 billion Irish tax.

Margrethe Vestager, the European Commission’s competition commissioner, during a press conference in Brussels, Belgium, Tuesday, Sept. 10, 2024. Apple Inc. lost its legal battle over a 13 billion euro ($14.4 billion) Irish tax bill, and Google lost its challenge to a 2.4 billion euro fine for abusing market power in a double whammy of repression by the European Union against Big Tech. Photographer: Simon Wohlfahrt/Bloomberg

The EU case over Google’s AdSense service is the latest in a trilogy of legal disputes over cases that have set the course for Vestager’s tenure, which is about to end after a decade.

EU regulators targeted Google’s role as an ad broker for websites, where its AdSense for search product places advertising on platforms including newspaper websites, blogs and travel sites.

When the Brussels watchdog hit Google with the €1.5 billion penalty in 2019, it said Google’s contracts with websites prevented them from accepting rival search ads from Microsoft and Yahoo. When a user entered a query into a Google search box on websites, ads from such rivals were blocked. All the problematic contracts were canceled by 2016, when the EU escalated the investigation.

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The mistakes of the EU

Despite upholding “the majority of the panel’s findings”, the judges, in Wednesday’s ruling, said regulators had erred in assessing the duration of the clauses at issue, as well as the market share covered by them in 2016.

The EU Commission “has not established that the three clauses it has each identified constitute an abuse of a dominant position and, together, a single and continuous violation” of antitrust rules, the court said.

In a hearing two years ago, Google’s lawyers described the 2019 EU penalty as a “near-criminal fine of very large proportions”.

Google, based in Mountain View, Calif., said Wednesday it was “pleased that the court recognized the errors in the original decision and reversed the fine. We will closely review the full decision.”

“This case is about a very small subset of text-only search ads placed on a limited number of publisher websites,” the company said. “We made changes to our contracts in 2016 to remove the relevant provisions, even before the commission’s decision.”

The Brussels-based commission said it would “carefully study the ruling and reflect on possible next steps”.

The EU Google cases marked the centerpiece of Vestager’s efforts to crack down on the growing power of big tech companies. It has fined the Alphabet unit more than 8 billion euros so far and also launched a fourth case in Google’s ad tech business, suggesting the firm must be wound up to ease antitrust concerns. A final decision in that investigation is pending.

Following the EU’s example, the US Department of Justice also took over Google. Like Vestager, he is also pushing for a break-up of Google’s adtech business as a lawsuit begins across the Atlantic.

Top photo: Google headquarters in Mountain View, California. Photographer: Justin Sullivan/Getty Images.

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