In a significant development, an EU court has scrapped a €1.49 billion fine levied against Google for its alleged dominance in online advertising. This decision comes after the Luxembourg-based General Court ruled that the European Commission, the EU’s competition watchdog, erred in its assessment of Google’s practices. Specifically, the court found that the Commission failed to adequately consider all relevant factors when determining the duration of certain contract clauses it deemed abusive.
This ruling is a major win for Google, especially following last week’s decision by the EU’s highest court upholding a €2.42 billion fine for favoring its own comparison shopping service. Between 2017 and 2019, the EU imposed a total of €8.2 billion in fines on Google for antitrust violations. The €1.49 billion fine, the third of these penalties, focused on Google’s AdSense service.
However, the legal battles between Google and the EU are far from over. The company is also challenging a €4.3 billion penalty levied for restricting Android smartphone features to boost its search engine dominance. This case, which saw the General Court slightly reduce the fine to €4.1 billion in 2022, is now before the European Court of Justice.
The EU is taking a more proactive approach to regulating tech giants with the introduction of the Digital Markets Act (DMA). This new law outlines specific dos and don’ts for online businesses, aiming to prevent tech giants from abusing their power before they become serious issues requiring large fines. Google, alongside Meta (Facebook) and Apple, is already under investigation under the DMA.
Across the Atlantic, Google is facing similar scrutiny from US regulators. The company recently faced its second major antitrust trial in less than a year, with the US government accusing it of monopolizing ad technology. This trial comes after a US judge ruled in August that Google’s search business was an illegal monopoly, potentially leading to a breakup of the tech behemoth.
The ad tech industry is under increasing scrutiny globally. British and EU competition watchdogs have preliminary findings suggesting Google is abusing its dominance in this market. Google has the opportunity to respond to these investigations before regulators reach final conclusions. Meanwhile, Google’s parent company, Alphabet, reported a significant increase in revenue from online ad searches, reaching $48.5 billion in the second quarter of this year.
The EU’s decision to overturn the €1.49 billion fine signifies a shift in the landscape of antitrust regulation. As the legal battles continue, it remains to be seen how the EU’s new approach to regulating tech giants will impact the future of these companies.
