EC starts case against Google for abuse of power in search advertising market
The European Commission has brought a third competition action against Google, alleging the company abused its dominant position in the search advertising market. In addition, the EU will provide additional evidence in the Google price comparison service case.
The core of the matter is that, according to the Commission, Google has infringed competition rules through its AdSense platform over the past ten years by imposing certain conditions in agreements with a limited number of large third parties. Specifically, these are search ads, which are displayed after users search for something on websites that use a custom search engine from Google.
Those parties are ‘direct partners’, who display advertisements from Google via AdSense. The Commission is concerned that Google has imposed restrictions in those agreements with those partners. For example, these parties would not be allowed to use search ads from Google’s competitors, and they would have to assign a prominent place on their website to a minimum number of the company’s search ads. Competing ads may also not be placed next to Google’s and permission must first be requested before their display can be changed.
As a result, Google hinders competition and the Commission has now sent a ‘statement of objections’. According to Margrethe Vestager, European Commissioner for Competition, Google has “released innovative products that have changed our lives.” But that doesn’t mean the company can “deprive others of the opportunity to compete and innovate.”
In another pending case, concerning Google’s prioritization of its own comparison shopping service in search results, the Commission sent so-called ‘additional statement of objections’. In doing so, it bolsters previous evidence by addressing how Google has favored its own service and the impact a website’s prominent display has on traffic to the service. Both Google and parent company Alphabet have two months to respond to the additional announcement, in the new case that is ten weeks.
In addition to Google, the current case is also against Alphabet. The third competition case in which the company is involved concerns possible abuse of power by Android. Google would, among other things, oblige manufacturers of tablets and smartphones to install certain Google apps on their devices by default. In this case, the Commission expects a response from Google in September. In the new case, a fine of up to ten percent of the annual turnover can also be imposed.