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

     
11:32 am on Mar 20, 2019 (gmt 0)

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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]
11:34 am on Mar 20, 2019 (gmt 0)

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System: The following message was spliced on to this thread from: https://www.webmasterworld.com/goog/4939444.htm [webmasterworld.com] by engine - 11:36 am on Mar 20, 2019 (utc 0)


Google has been fined by the competition authorities in Brussels over anti-competitive practices.

The €1.5bn (£1.3bn) fine is for blocking rival online search advertisers.

"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," said Commissioner Margrethe Vestager.

Google now been fined a total of over EUR 9 billion in last 2 years by the European Commission.

[bbc.co.uk...]
12:09 pm on Mar 20, 2019 (gmt 0)

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Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.


Two thoughts:

1. Its obviously anticompetitive behaviour
2. Its very similar what Microsoft got away with agreements with PC manufacturers and Windows licences. I do not know whether they still do it.
12:43 pm on Mar 20, 2019 (gmt 0)

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Google now been fined a total of over EUR 9 billion in last 2 years by the European Commission.


The EU project has to fund its survival by all means possible.

They've got giant GDPR fines up their sleeve too.
12:48 pm on Mar 20, 2019 (gmt 0)

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I'm against governments receiving that kind of money as a "penalty". Governments everywhere, with lawyers funded by taxpayers, will not ignore opportunities to try for billion dollar payouts too, especially when it's "for the children".

I side with Google on this one, something I don't often do, and I'm not sure about the EU rulling on their own claims either. The publishers had a choice to use something other than adsense and, indeed, many webmasters used those alternatives. They got this ruling wrong.

The European Commission itself is anti-competitive, who are these people? Perhaps they shouldn't be allowed to rule on the claims they make.
1:06 pm on Mar 20, 2019 (gmt 0)

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The EU project has to fund its survival by all means possible.

They've got giant GDPR fines up their sleeve too.


haha you really think the EU needs Google's money to survive? the ECB alone printed €2.5 trillion over 3 years.
EU GDP - $19.1 trillion, GDP growth 2.1% 2018
1:19 pm on Mar 20, 2019 (gmt 0)

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who are these people?


They are a government. I agree it would be better to have fines set by the courts instead of executive, but the EU does not have the same separation of power that the US (and many EU states at a lower level) do. A court would have imposed a very large fine so it does not make much difference.

Laws in most developed countries (including the US) are similar. Its normal competition law.

I side with the EU on this one, something I don't often do!

the ECB alone printed €2.5 trillion over 3 years.


The EU prints money by buying Eurozone corporate and govt bonds. It does not go into the EU budget.

The EU does have a potential budget problem if there is a no deal Brexit, but I think its unlikely to be a motive for fining an organisation that is blatantly breaking the law.
2:16 pm on Mar 20, 2019 (gmt 0)

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This is getting a bit political? Yes, I did it too.

There are two relevant questions:

1. What it means for sites.
2. What Google may change.
3. How strong Google's market position actually is (is it dominant? network effects are strong?)
2:57 pm on Mar 20, 2019 (gmt 0)

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The EU prints money by buying Eurozone corporate and govt bonds. It does not go into the EU budget.


It does go into the EU budget,
Governments sell bonds to the ECB, they then pay this money in to the EU budget.
3:18 pm on Mar 20, 2019 (gmt 0)

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There are other aspects to this antitrust ruling, including that Android users will find it easier to choose an alternative browser on their mobile devices.
Now we’ll also do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones. This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.

[blog.google...]
3:52 pm on Mar 20, 2019 (gmt 0)

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Too little too late.
Alphabet needs to be broken up: particularly Adense/Doubleclick needs to be completely separated from the main search advertising business.
YouTube too should also be separated out - and if the Android/Chrome business was on it's own, then we'd be living a better world.

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

The EU haven't gone far enough (or fast enough) by orders of magnitude.
9:51 pm on Mar 20, 2019 (gmt 0)

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I'm against governments receiving that kind of money as a "penalty"

Well I'm not.

However I have long held the belief that corporate fines of this magnitude should not be a fixed sum as in this case, but rather 5% of shareholder funds for first offence, 10% second, 20% third, then 40%... then 80%... Along with jail terms.

That I am sure would concentrate a lot of minds among the corporate [greed is good] cowboys.

As for shareholders? I was taught as far back as 1956 in High School there is no such thing as a benign shareholder, yes you have limited financial liability but never limited moral liability for your investment.
9:54 pm on Mar 20, 2019 (gmt 0)

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The trade wars continue.
10:25 pm on Mar 20, 2019 (gmt 0)

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Along with jail terms.
For whom? The whole point of incorporation is that no individual human is subject to individual human penalties. Fines are therefore the only option.
10:25 pm on Mar 20, 2019 (gmt 0)

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G is the pot of gold at the end of the rainbow. Leprechaun catchers are out in force. That said, there's a lot of truth to the myth of the expanse and intrusion of g in all manners of business and personal lives and influencing governments ... so that needs to be addressed as well.

Will fines do it? Not by themselves. Somebody somewhere gets a payday from fines that won't really matter to g if they aren't forced to change the way they do business.
10:47 pm on Mar 20, 2019 (gmt 0)

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The whole point of incorporation is that no individual human is subject to individual human penalties.

I don't know about elsewhere, but across Australia there are many criminal offences under Corporate law.

There have been many cases world wide where CEO's, Directors and other officers have been jailed.

There is "nothing special, or sacred" about corporations - corruption excluded. I come from the school of thought that corporations and other businesses operate under a "social license" granted by the community, a community which dictates the terms under which you are allowed to continue to operate.
12:23 am on Mar 21, 2019 (gmt 0)

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The EU is not a country, the leadership seem to forget that a lot imo as they pass judgment on companies. Regardless of outcome the EU made the claim, ruled on the claim and issued the penalty which is not democratic in any way. Did any member country get to provide meaningful input on this?

If they did, did the EU listen to citizens and member country input?

[edited by: JS_Harris at 12:42 am (utc) on Mar 21, 2019]

12:42 am on Mar 21, 2019 (gmt 0)

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There is "nothing special, or sacred" about corporations. I come from the school of thought that corporations and other businesses operate under a "social license" granted by the community, a community which dictates the terms under which you are allowed to continue to operate.
Legally true in US, true in Canada, true in EU, true in Switzerland - and in all civilized jurisdictions.
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12:44 am on Mar 21, 2019 (gmt 0)

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The community didn't have a say and the EU isn't a country, this is uncharted and seemingly very undemocratic territory. The EU making claims, ruling on the claims and assigning the penalties without oversight or legal seperation is the stuff dictatorships are made of. Member countries can't even vote on their own futures anymore under this leadership, apparently.

[edited by: JS_Harris at 12:50 am (utc) on Mar 21, 2019]

12:48 am on Mar 21, 2019 (gmt 0)

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The whole point of incorporation is that no individual human is subject to individual human penalties.

Yes exactly, ask Jeff Skilling and or Ken Lay (former Enron executives), I'm pretty sure they thought the same thing.

Politics aside...
Really...

organization and while we could continue to vote for the leaders we want for our countries those leaders cannot tell the new AU(American Union) what the people want,

Doesn't the US have such an organization? I think it's called the electoral college.

Trump has tariffs, the EU has regulations and fines, China find bugs in canola seed its all part of the global trade game.
1:00 am on Mar 21, 2019 (gmt 0)

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The global trade game between countries, yes, but the EU isn't a country nor is Google.. Perhaps google needs to speak to the member countries individually again. Get their input. Make sure each member country has a voice in helping Google build the search practices THEY want. Right now member countries have very little say with EU leadership and that EU leadership is making claims, rulling on them AND deciding on penalties.

“Today’s decision is about how Google abused its dominance to stop websites using brokers other than the AdSense platform,” Vestager(the EU's anti-competition commisioner) said.


It's a play on words, nobody was told by Google that they had to use adsense instead of other options. Every webmaster was free NOT to use adsense. When you choose adsense you abide by their terms and are always very free to stop using them. Anyway, in listening to this woman describe the decision it's clear that the "rulers" didn't know much about the technical aspects of online advertising. I don't think a good result was expected, nor should one be for any company falling under EU wrath.

I will not shed a tear for money lost by Google but it's Google today and can be anyone tomorrow.

[edited by: JS_Harris at 1:21 am (utc) on Mar 21, 2019]

1:16 am on Mar 21, 2019 (gmt 0)

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@JS_Harris : you go on and on and on "the EU is not a country" a totally irrelevant statement, while apparently paying no attention (or maybe having no clue) to what the EU actually *IS*, which is relevant to this discussion. It is obviously a Union of countries that collectively act as a single country in matters they have decided to act as a single country. And yes, for the purpose of this discussion the EU acts like a single country. So, from the EU site:
At the core of the EU are the 28 Member States that belong to the Union, and their citizens. The unique feature of the EU is that, although the Member States all remain sovereign and independent states, they have decided to pool some of their 'sovereignty' in areas where it makes sense to work together.

In practice, this means that the Member States delegate some of their decision-making powers to the shared institutions they have created, so that decisions on specific matters of common interest can be made democratically at EU level.

Several institutions are involved in making decisions at EU level, in particular:

- the European Parliament, which represents the EU's citizens and is directly elected by them;
- the European Council, which consists of the Heads of State or Government of the EU Member States;
- the Council, which represents the governments of the EU Member States; and
- the European Commission, which represents the interests of the EU as a whole.
Hope this helps and hope you realize that repeating "the EU is not a country" is nothing more than a worthless annoyance that contributes nothing to this discussion.
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1:24 am on Mar 21, 2019 (gmt 0)

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the European Parliament, which represents the EU's citizens...

The EU has no citizens and supercedes all, apparently, even countries. It's led by unelected officials who make claims, rule on those claims and issue penalties themselves. I'm not trying to insult here, that is what it is.

I guess what I'm saying is where's the democracy and who are these people? I would very much like to see Google negotiate with the leaders of individual countries over there once again, the elected officials whom, by virtues of being elected, represent citizens. I don't like our current leadership over here but he was elected and I respect that. I can't even imagine living somewhere that I can vote for someone who can't change anything because they are told what to do.

Google “prevented its rivals from having a chance to innovate and to compete in the market on their merits,”

Actually Google provides tools other companies use all the time and again, no webmaster has ever been told they can't switch from adsense to a competing ad service. They are simply told that if they want to use adsense they are not to use other services that offer contextual ads in the same manner. You agree to that when you sign up for adsense, but you're free not to use adsense.

The reasoning. It's like being penalized for driving a ford because, by choosing a ford, you didn't choose a Chevy. The reasoning isn't there(and the regulators don't know how it works).

There is a video on youtube of an EU regulator demanding to know if an apple phone can be tracked by Google. Google's tech officer says he'd have to see the phone because Google offers apps that can be opted in to show location. The regulator is 100% clueless to that and simply wants to know if it can be done, insinuating that if it can somethign is wrong.

[edited by: JS_Harris at 1:37 am (utc) on Mar 21, 2019]

1:29 am on Mar 21, 2019 (gmt 0)

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The EU has no citizens
Is that what you understood from the above lengthy post? Well, good luck to you.
1:45 am on Mar 21, 2019 (gmt 0)

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I'm sorry, if the EU has been unified into a sovereign country I missed the vote of citizens in individual member countries on that. Back on track, this is between a corporation(Google) and a Union(the EU).

We're all free to not use adsense. In fact I don't wherever I find a more profitable direct advertiser. The argument just doesn't hold and the penalty is far out from my perspective. Suggesting I have issues for thinking differently isn't needed.

I agreed with the last ruling to give users the choice of first browser, even though users were free to download others, but this overstepped, in my opinion.

Find a way to monetize that isn't vulnerable to ad blockers. If Google complies then webmasters will be free to have even more contextual ads per page. We'll have competing contextual ad code trying to gleen what the other displayed too. Ugh. We'll have competing contextual ad code offering your competitors to show their ads every time one of yours shows on adsense. Ugh. Webmasters will embrace this behavior if advertisers want to pay for it. UGH!

Just ugh. That's my opinion. The EU will have to rule that a page cannot show dueling contextual units to stop ads on the same page from targeting each other. What do I know, I'm just a citizen who owns the site these behemoths fight over.
3:09 am on Mar 21, 2019 (gmt 0)

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Think it through.

- Which keyword do you want to target with this ad?
- If a contextual network is found on the page with a competitor's ad do you want to show an alternate attack ad instead?
- If so, which company would you like to target? (upload attack ad)
- How much are you willing to pay per click?

Done, you will be charged 0.58 cents for alternate ad B every time we find that competitor, otherwise the cost is 0.48 cents per click. Thank you.

Dueling contextual units on a page is not a good idea. It should make for some funny on-page ad fighting though. Political candidates being able to target the ads of other candidates should be quite profitable I'd think. Webmasters would be dumb not to set up competing ad networks to take advantage of the increased competition, lol. In the end though, we all lose.
12:38 pm on Mar 21, 2019 (gmt 0)

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I'm sorry, if the EU has been unified into a sovereign country I missed the vote of citizens in individual member countries on that.


Apparently you did miss multiple such votes. [en.wikipedia.org...]

My view is that if it looks like a duck and quacks like a duck, its a duck. The EU has a constitution (no longer officially called that, but the looks like a duck thing applies again), a flag, a parliament, a court, a national anthem, its name appears on passports, etc. The relationship with countries is broadly similar to that between the US and its states.

Discussing whether it is a real country or not is relevant and just a matter of semantics. Shall we call EU Commission "the governmental or intergovernmental body with the powers relevant to competition at the EU level"?

@NickMMS, Trump also has accusations against Huawei that other countries are sceptical about. On the other hand some things are genuine. I do not actually think the EU is hostile to American tech giants - they spend a lot of lobbying and have more influence on policy than European SMEs do.

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.
6:27 pm on Mar 21, 2019 (gmt 0)

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It would be better to have fines set by the courts instead of executive
Nowhere in Western jurisdictions are Executive fines imposed by courts. Executive fines are levied consequent to competent Authority investigation & determination, their magnitude is ruled by legislation and regulations, none are irrevocable, all are open to challenge at court, and most are indeed challenged at court. Basics.
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6:43 pm on Mar 21, 2019 (gmt 0)

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After dropping all week, Google stock is up .61% today. That tells me that investors saw that fine and thought, "Whew! I was expecting that to be worse."
6:59 pm on Mar 21, 2019 (gmt 0)

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Nowhere in Western jurisdictions are Executive fines imposed by courts.


"Its what everyone does" does not mean "its what everyone should do".
This 53 message thread spans 2 pages: 53