Summary of Google wins legal bid to overturn 1.5 billion euro antitrust fine in EU digital ad case

  • abcnews.go.com
  • Article
  • Summarized Content

    Google Victorious in Legal Battle with EU over Search Ads Fine

    In a significant legal victory, Google has successfully overturned a €1.49 billion ($1.66 billion) antitrust fine imposed by the European Union (EU) five years ago, which targeted its online advertising business related to search ads on third-party websites.

    • The EU's General Court annulled the decision by the European Commission, the bloc's top antitrust enforcer, in its entirety.
    • The court ruled that the commission had committed errors in assessing the exclusivity clauses in Google's contracts with websites that barred them from running similarly placed ads sold by rivals.
    • The commission failed to demonstrate that Google's practices deterred innovation, harmed consumers, or helped the company strengthen its dominant position in national online search advertising markets.

    Background: EU's Antitrust Case Against Google's Search Ads Business

    The European Commission's 2019 ruling focused on a specific aspect of Google's ad business: ads sold next to Google search results on third-party websites. Regulators accused Google of inserting exclusivity clauses in its contracts that prevented these websites from running similar ads sold by Google's competitors.

    • The commission argued that Google's behavior resulted in advertisers and website owners having less choice and potentially facing higher prices that would be passed on to consumers.
    • However, Google claimed that it changed its contracts in 2016 to remove the provisions in question, even before the commission imposed its decision.

    Google's Legal Victory and Potential Next Steps

    While the ruling can be appealed on points of law to the Court of Justice, the EU's top court, the European Commission stated that it will carefully study the judgment and reflect on possible next steps.

    • Google expressed satisfaction with the court's recognition of errors in the original decision and the annulment of the fine.
    • The tech giant stated that it will review the full decision closely.

    Ongoing Scrutiny of Google's Ad Business

    Despite this legal victory, Google continues to face intense scrutiny over its digital ad business from regulators on both sides of the Atlantic.

    • In the United States, Google is currently battling the Justice Department in a federal court over allegations that its dominance in the technology controlling billions of internet display ads constitutes an illegal monopoly.
    • British competition regulators recently accused Google of abusing its dominance in the country's digital ad market and giving preference to its own services.
    • EU antitrust enforcers suggested last year that breaking up the company might be necessary to satisfy competition concerns about its digital ad business.

    Broader Context: EU's Antitrust Crackdown on Big Tech

    The overturned fine was part of a broader antitrust crackdown by the European Union on Big Tech companies, marking the beginning of an era of intensifying scrutiny.

    • In the previous decade, the European Commission punished Google with three antitrust penalties totaling about €8 billion.
    • This legal victory comes a week after Google lost a final challenge against a separate EU antitrust case for its shopping comparison service, which also involved a hefty fine.

    Implications and Future Outlook

    The court ruling represents a significant win for Google in its ongoing battles with regulators over its online advertising practices. However, the company faces continued scrutiny and potential challenges from competition authorities worldwide, reflecting the growing concerns over the market power and practices of Big Tech firms.

    • Google's digital advertising business, which generates the majority of its revenue, remains a focal point for antitrust investigations and potential regulatory actions.
    • The outcome of this case could influence future legal battles and shape the competitive landscape in the online advertising industry.
    • Regulators and policymakers are likely to continue exploring measures to promote competition and address potential anticompetitive practices in the digital advertising market.

    Discover content by category

    Ask anything...

    Sign Up Free to ask questions about anything you want to learn.