The European Union’s General Court annulled the European Commission’s €1.49 billion fine on Google for anticompetitive behaviour with its AdSense product on Wednesday (18 September), leaving the Commission just over two months to appeal.
The decision is a setback for the Commission, which fined Google €8 billion in three competition cases. Just last week, €2.42 billion was confirmed as a final decision.
In March 2019, the Commission fined Google €1.49 billion for abusing its dominant position in the online search advertising market.
Google imposed restrictive clauses in contracts with third-party websites using its AdSense for Search product, Google’s website monetising tool through advertisement, between 2006 and 2016. These exclusive clauses allegedly blocked competitor ads services from being displayed on these sites, therefore limiting competition.
“The General Court […] annuls the decision by which the Commission imposed a fine of almost €1.5 billion on Google,” reads EU’s General Court press release.
The General Court writes that the Commission “failed to take into consideration all the relevant circumstances in its assessment” of Google’s abusive contract clauses and the definition of the covered market.
The court, therefore, ruled that the Commission had not established that the identified clauses “constituted an abuse of dominant position ” and were not, therefore, in breach of the EU’s Treaties.
“We are pleased that the court has recognised errors in the original decision and annulled the fine,” told Euractiv a Google’s spokesperson.
The spokesperson also stated that Google contracts were changed in 2016 in order to remove the provisions contested by the Commission.
The case
Under the Google AdSense deals, to feature a Google search box, websites had to exclusively display ads provided by Google.
In addition, Google required premium placement for its ads and included restrictive modification clauses in its contracts, under which publishers had to “seek written approval” from the US tech giant before any modification in how rival adverts were displayed.
Google appealed the fine in June 2019, arguing its practices were designed to ensure a consistent user experience. The European Commission now has two months and 10 days to appeal the decision to the European Court of Justice (ECJ).
A commission spokesperson told Euractiv the EU competition regulator will assess the decision but did not confirm or infirm it will appeal.
The broader picture
This legal dispute is one of three fines that the Commission imposed on Google during Competition Commissioner Margrethe Vestager’s term in office. In total, the EU executive has imposed €8 billion in fines on Google, all of which the firm has appealed.
Earlier this month, the European Court of Justice confirmed one of the Commission’s fines, of €2.42 billion, imposed because the firm was found to be self-preferencing its Google Shopping service on its web browser.
Another legal dispute for a €4.34 billion fine is still under review. In this case, the Commission argued that the firm was restricting competition via its mobile operating system, Android.
The EU General Court upheld the fine in September 2022, although trimming it to €4.125 billion. Google then appealed the decision to the ECJ.
In June 2023, the Commission found that Google might have favoured its own exchange tool, AdX, starting in 2014. Google can exercise its rights of defence but might face a fine of up to 10% of the company’s annual worldwide turnover.
The UK Competition Authority (CMA) ruled in September 2024 that Google used its dominant position to give AdX an unfair advantage.
Google is also facing major antitrust scrutiny in court in the US.
Advertisement is Google’s main source of revenue.
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