E.U. Fines Google 1.49 Billion Euros Over Antitrust in Advertising

[engine]

The European Union has fined Google €1.49 billion for abusive practices in online advertising, and specifically, forcing publishers of its AdSense business to turn down advertising from Google’s rivals

"Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts. Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate - and consumers the benefits of competition.”

[europa.eu...]

Earlier stories
Google AdSense E.U. Antitrust Investigation: Close to Finalising [webmasterworld.com]
Google fined €50 Million over GDPR [webmasterworld.com]
Google Appeals Against E.U.'s $4.9bn Android Antitrust Fine [webmasterworld.com]
Google hit with $2.7 Billion Fine by EU [webmasterworld.com]

[heisje]

"Its what everyone does" does not mean "its what everyone should do".

Wherever there is a very broad international consensus personal perceptions are little more than personal perceptions of negligible practical consequence. Having said that, one is always free to start a crusade to overturn the status quo (better not try this in China, Russia and such).
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[IanCP]

Nowhere in Western jurisdictions are Executive fines imposed by courts

Not entirely correct

Well in the olden days [dunno if it has changed] when our then Australian Competition and Consumer Commission was headed by the good Professor Allan Fels AO - folk hero, consumers legend - there was a joke in corporate circles.

"If Allan Fels has your company in his sights then pray that on the day he fines you that he enjoyed a good lunch, and is in a mellow mood"

There was NO upper limit on the fine he could impose.

On a brighter note a corporation could appeal the conviction/fine before a court of law. Were it successful then not only were they awarded legal costs, they were also awarded all manner of ancillary costs such as all staff costs in preparing evidence etc.

Were your corporation unsuccessful? Your impressive fine was automatically doubled, and you got to pay all and every cost the ACCC could dream up. There was only ever one successful challenge, and that was entirely due to a legal technicality stuff up.

Many, many years ago Allan Fels appeared before our National Press Club for a lunch time speech. Taking questions from the floor he was asked what good had he done.

"I'm glad you asked that question, these press releases [holding them up] over the years show these corporations have been fined:

ABC Corporation $25 million
DEF Corporation $18 million
[...]
UVW Corporation $15 million
XYZ Corporation $28 million

The follow up question was of course - "Well how come the public don't know about that?"

Answer: "Well when you all now journey back to your respective offices, please ask your editors as to why they never published each and every one of those press releases"

Raucus laughter - huge applause. That original question and answer never appeared in any news coverage of the occasion the next day.

[heisje]

There was NO upper limit on the fine he could impose.

Who am I to contradict an Aussie, I would hate to do that anyway, we all love the "Down Under". Still, I must admit I have seen this statement with a measure of scepticism . . . .
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[mosxu]

This is not trade war this is a slap on the wrist,

Nothing will change for the webmaster, by now EU should have enforced Google to declare any negative taken action against a person or entity.

Big Tech is ruling and and moving agresevily against anybody in their way.

Trump also is the biggest looser not seeing the negativity crated by the Big Tech around him.

[motorhaven]

Never in the history of mankind has one organisation had such an ability to manipulate global markets on such a colossal scale.

Google doesn't come close the East India Company. It controlled half of all global trade, controlled entire countries, had its own large army and essentially ruled over the lives of tens of millions of people

[tangor]

As the Silly Season is approaching (2020 in USA), the pushback on Tech has been gaining steam. I suspect the pushback will become a shove in short order. Meanwhile, the love/hate relationship between Tech and MSM is showing signs of strain, I would not be surprised to see MSM turn on Tech (after all, Tech is eating their lunch and making them pay for it, too!)

[glitterball]

Google doesn't come close the East India Company. It controlled half of all global trade, controlled entire countries, had its own large army and essentially ruled over the lives of tens of millions of people

Hmmm, actually I was thinking about the East India Company when I made that comment.
I would suggest that Google's power of influence is every bit as powerful as the East India Company - less the standing army.

[Shaddows]

less the standing army.

Yeah, their robotics and AI programs could never be combined for that purpose. Wait for the tie-up with Musk, and they'll have ICBMs.

More seriously, the East India Company controlled whole economies and entire sectors of trade, under licence in a mercantilist system from the biggest Empire the world has ever seen. There was simply no alternative.

Google might have fingers in a lot of pies, but they do not have a legal "right" to those pies.

On the substantive matter of the OP, I dislike the EU's flavour of antitrust laws, especially as they extend to disadvantaging Suppliers, instead of the more usual disadvantaging of Consumers.

However, on this one, they are absolutely right. Indeed, I am surprised other jurisdictions are not pushing similar cases.

(Side note: EU cannot mandate Google identify any wronged party. Any wronged party can try and sue, but based on EU law, they would need to prove direct losses. Two words there: "prove", and "direct". In that case a court would award damages.

As @heisje mentions, Regulatory Authorities (not courts) enforce breaches of regulations through fines. Courts rule on individual cases as above. Courts are generally also the final recourse if a company disputes an Authority's interpretation of the law, or the scale of the fine levied. They Court will confirm (or otherwise) if the Authority is correct in its interpretation of the law, has acted within it's remit in terms of investigatory and enforcement powers, and has imposed a fine that is within scope. Assuming the company loses, it will then get all the legal costs added to the fine.

This is true across all jurisdictions I can think of, including EU (plus Germany, France, UK domestically), the US, and most Commonwealth countries. In the EU, the Regulatory Authority is vested in Margrethe Vestager, European Commissioner for Competition. The appeal court would be CJEU. My guess is it would be the General Court, not the ECJ, but I could be wrong)

[motorhaven]

But Google doesn't control anywhere near as much half the globe's trade. Even with advertising, they are digital, not off-line advertising: they account for under 1/3rd of online digital advertising - but really not even that amount, since a huge chunk of their advertising it fed through other ad networks.

And trade, as of 2016, world GDP was $75.87 trillion dollars. Google's total sales for 2017 was $110 billion. A.drop.in.the.bucket.

Government Influence. While I don't have worldwide numbers, spending on federal lobbying in the USA was $3.42 billion. Google accounted for $21.7 million of that.

Retail Sales
I'll go with retail since wholesale is harder to find data. 2018 retail sales, online accounted for 14.3% of all sales. Even if Google controlled 100% of online retail sales, which they don't, they'd only control 14.3%, nowhere near half or more.

I agree Google has privacy and monopolistic practices which need to be reigned in (though I don't agree with some of the measures mentioned here). And yes, they have a lot of influence. But no, they are not a boogyman influencing most of this world, and I view it as hyperbole.

[heisje]

As @graeme_p concisely said:

These companies have got away with breaking the rules, and a crackdown is overdue, and there are signs its coming in the US already. The failures of competition regulators are pretty bad so I am glad it is changing. They have repeatedly been allowed to buy competitors and exploit network effects unchallenged.

Hear, hear.
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[mcneely]

We used to write Doubleclick out as spyware back in the day -- Then Google came along and tried to legitimize it -- Now we have add blockers and Doubleclick is right back to where it was before Google came along

[heisje]

Re-posting here a quote by @flatfile from Pinterest's SEC filing. as it is very relevant to the present discussion:

Our ability to maintain and increase the number of visitors directed to our service from search engines is not within our control. Search engines, such as Google, may modify their search algorithms and policies or enforce those policies in ways that are detrimental to us, that we are not able to predict or without prior notice. When that occurs, we expect to experience declines or de-indexing in the organic search ranking of certain Pinterest search results, leading to a decrease in traffic to our service, new user signups and existing user retention and engagement. We have experienced declines in traffic and user growth as a result of these changes in the past, and anticipate fluctuations as a result of such actions in the future. For example, in the first quarter of 2018, Google de-indexed our keyword landing pages, which negatively impacted traffic and user growth in the quarters that followed. Our ability to appeal these actions is limited, and we may not be able to revise our search engine optimization (“SEO”) strategies to recover the loss in traffic or user growth resulting from such actions. Changes in policies or their enforcement may not apply in the same manner to our competitors, or our competitors’ SEO strategies may be more successful than ours. In addition, some of these search engines are owned by companies that compete with various aspects of our business. To offset the impact on our user growth, we would need to increase our investment in other growth strategies, such as paid marketing or other initiatives that drive user acquisition, which may cost more and be less effective. Any significant reduction in the number of Pinners directed to our website or mobile application from search engines could harm our business, revenue and financial results.

(thanks @flatfile!)
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[motorhaven]

Concerning the Pinterest item, its utterly unreasonable everyone can expect to constantly list at or near the top of search results for everything relevant to their site/service. Not with hundreds, thousands or even millions of sites possibly occupying the same niche. If anything, companies such as Pinterest have an advantage over countless smaller sites who provide similar services due to their ability to afford more SEO services. They're whining about having to compete in the marketplace.

If Google de-indexed pages of theirs, it's more likely it's not Google's fault but something Pinterest did. And they really have the gall to complain at all considering the bulk of their content is **cough** stolen **cough** from others?

As has been said on WebmasterWorld many times, there are many ways to get traffic other than Google, and building a strategy dependent solely on "free" traffic from them is putting your eggs in one basket. For decades if a company wanted to be known, they spent money be it on advertising, marketing, guerilla marketing, or P/R efforts. Along comes the Internet and they get exposure for free, and then get upset when it's not free.

[heisje]

@motorhaven : I am in full agreement with your post above, as I believe most in WW are. Purpose of quoting here Pinterest's SEC filing (they have nothing to complain!) is how vividly they describe Google's immense, unrestrained and unchecked power even over well funded large media companies, to say the least of the average webmaster.
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[Mark_A]

@motorhaven

For decades if a company wanted to be known, they spent money be it on advertising, marketing, guerilla marketing, or P/R efforts.

Interesting point and I don't wholly disagree, except there is a company that I think never spent a dime on advertising, correct me if I am wrong, and that company is Google itself.

[motorhaven]

Google spends hundreds of millions of dollars annually advertising itself:

[mediapost.com...]

[clairedivas]

very sad news for google. its not good way for google.

[Mark_A]

@motorhaven interesting link, thanks, I was pretty sure in their early days it was all word of mouth.

[motorhaven]

@Mark_A

In their early days, yes it was word of mouth. But that word of mouth was fundamentally based on marketing the company:

Their 59th employee was Douglas Edwards as director of marketing. This was in 1999, less than a year after their official founding.

- They spent money attending events and shows.
- They ran paid promotions on NPR's Morning Edition, All Things Considered, and Car Talk broadcasts in 1999. Shows that were popular with techs and wealth listeners at the time - essentially targetting influencers.
- They paid the Standford Solar Car project with a $10,000 sponsorship to get their logo on a car.
- Setup a projector to display search queries live on the sidewalk, marketing themselves to pedestrians at night.
- They partnered with Yahoo in 1999 to provide search, essentially having their branding on Yahoo.
- Pushed out numerous press releases about their search, how it worked, etc.
- They promoted themselves heavily at acedemia that they had non-biased search not influenced by advertising.
- Due to press releases and targetting influencers, they got more wide-spread exposure from articles in 1999 (Forbes is one examples).

Google's exec team were famous for being against marketing, and advertising the company, but they did it nonetheless. Their early text based ads based on search results, they had a team of employees who cold called advertisers.

[IanCP]

They partnered with Yahoo in 1999 to provide search, essentially having their branding on Yahoo

Which then caused my site to enter the universe, which in turn started costing me serious money in hosting costs because of escalating traffic, which caused me to monetise my site through Amazon to cover costs.

AdSense years later in 2003 became an extravagant 24/7 taxi meter.

[JS_Harris]

Graeme: "Siri, Is the EU a country?"
Siri: "No, there is no interest in becoming even a loose confederation yet"

Regardless, Google clearly wants to serve the people, what's the EU's motive if they aren't listening to the people? Multi billion dollar "penalties" in quick succession will wake any company revue all legal avenues, including questioning the EU leadership itself I would think.

[Robert Charlton]

I was pretty sure in their early days it was all word of mouth.

Yes, I remember hearing that at the time, and for a fair number of years.

[Rndm]

"Regardless, Google clearly wants to serve the people"

LOL