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EU fines Google £1.3bn for anti-competitive practices

Europe’s antitrust watchdog has handed Google a €1.49bn (£1.28bn) fine for exploiting its market position to undermine its rivals.

Speaking in Brussels on Tuesday, the EU competition commissioner Margrethe Vestager (pictured) said Google had imposed anti-competitive contractual restrictions on third party websites for more than a decade.

In 2006, the US search giant started allowing publishers to incorporate its search function into their sites, enabling users to trawl through huge archives of content. But the US tech giant stipulated that the publishers could not feature rivals’ adverts on the search results page.

Three years later, it softened its approach, replacing exclusivity clauses with contracts that prevented publishers from positioning rivals’ ads in the most visible parts of the websites’ search results.

However, it also required the publishers of these websites to seek approval before changing how rivals’ adverts were displayed, giving it the power to control how its competitors’ adverts appeared.

The Commission acknowledged that Google had stopped carrying out the anti-competitive practice in 2016, but said the fine, amounting to 1.29 per cent of its turnover in 2018, took account of the “duration and gravity of the infringement”.

The US search giant is now likely to face a deluge of civil actions from rivals who believe they have been unfairly penalised as a result of its conduct. They will seek to take advantage of the Antitrust Damages Directive, which simplifies the process for securing damages for anti-competitive practices.

“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,” said Vestager. “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.”

The Commission’s intervention marks the third time in as many years that Google has faced fines for anti-competitive behaviour. It was fined €2.42bn in 2017 and €4.34bn in 2018 for giving an illegal advantage to its shopping service and search engine respectively.

In a statemen,t Kent Walker, Google’s global affairs chief, did not say Google would be appealing the fine. “We’ve always agreed that healthy, thriving markets are in everyone’s interest,” he said. “We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.”