Introduction to the EU Cartel Penalty
The European Commission has imposed a cartel penalty of $2.95 billion on Alphabet’s Google for practicing anti-competitive practices in its lucrative adtech business. This marks the fourth punishment for Google in its decades-long struggle with EU competition regulators.
Background of the Penalty
The step was triggered by a complaint from the European Publishing Council and consists of a threat to US President Donald Trump to avenge against the European Union against Big Tech. The EU Competition Commissioner had originally planned to distribute the fine on Monday, but it was delayed due to opposition from the EU head of trade.
Google’s Anti-Competitive Practices
The Commission said Google preferred its own online display services to the disadvantage of competitors and online publishers and has been abusing its market power since 2014 until today. Google ordered Google to stop self-preferencing practices and take measures to set its inherent conflicts of interest.
Compliance and Remedies
The company has 60 days to inform the Commission how it wants to adhere to this order. The Commission confirmed its provisional view that Google should sell part of its services, but said that it first wanted to hear and evaluate the compliance efforts by Google.
Statement from the EU Competition Commissioner
"Google must now bring in a serious means to eliminate its conflicts of interest, and if this does not do so, we will not hesitate to impose strong remedies on," said the EU Competition Commissioner in a statement. "There are digital markets to serve people and have to be based on trust and fairness. If the markets fail, public institutions have to act to prevent dominant players from abusing their power," she added.
Google’s Response to the Penalty
Google criticized the EU decision and said it would question it in court. "The decision of the European Commission on our AD-Tech services is wrong and we will make an appeal. It imposes an unjustified fine and requires changes that harm thousands of European companies by making it more difficult for them to make money," said Lee-Anne Mulholland, Vice President, Global Head of Regulatory Affairs.
Comparison to Previous Fines
The latest fine compares to a record penalty of 4.3 billion euros distributed to Google in 2018, 2.42 billion euros in 2017, and 1.49 billion euros in 2019. The fine is considered modest, reflecting a change in the approach of the EU Competition Commissioner.
