European regulators fined Google about $1.7 billion Wednesday on charges that its advertising practices violated antitrust laws, marking the third time in as many years that the region’s watchdogs have penalized the U.S. tech giant for harming competition and consumers.
Margrethe Vestager, the European Union’s top competition commissioner, said Google had engaged in “illegal practices” in a bid to “cement its dominant market position” in the search and advertising markets. She also said additional antitrust scrutiny of the tech giant was still to come.
The new penalty adds to Google’s costly headaches in Europe, where Vestager has fined the tech giant more than $9 billion citing antitrust violations. Her actions stand in stark contrast to the United States, where regulators — facing a flood of complaints that big tech companies have become too large and powerful — have not brought an antitrust case against Google or any of its peers in recent years, reflecting a widening transatlantic schism over Silicon Valley and its business practices.
Reacting to the fine, Kent Walker, Google’s senior vice president of global affairs, stressed in a statement that the company already has made “a wide range of changes to our products to address the [European] Commission’s concerns.” Google did not say whether it would appeal the E.U. decision.
In 2018, Vestager took aim at the company’s Android smartphone operating system, saying Google pressured mobile device-makers to pre-install the tech giant’s apps. A year before that, Vestager punished Google for giving its shopping-comparison service a better placement in search results over rivals’ offerings. In both cases, Google has started tweaking its business practices in Europe to comply with the law while appealing the E.U. decisions in court.
The company’s changes include a new effort, detailed Tuesday, to help owners of Android smartphones find and use competing search and Web-browsing services. The update applies only to Europe, Google said in a blog post, without indicating whether it would alter any of its mobile practices in the United States. It still earned some early praise from Vestager, who said Wednesday that the company has the “potential to give users a real choice.”
Vestager’s latest punishment targets Google’s relationships with third-party websites, from large retailers to small gossip blogs. Sites that participated in Google’s “AdSense for Search” program could take advantage of Google’s search tools on their Web pages, and users who searched those sites would see results alongside ads served up by Google.
But Google for a time prohibited those third-party sites from using rival ad services, then required prominent placement of its own ads — two of the many restrictions on AdSense customers that led the European Commission, the administrative arm of the European Union, to conclude in an initial complaint filed in 2016 that Google had acted in an anti-competitive way.
E.U. officials acknowledged in 2016 that Google had changed its AdSense contracts to allow for “more freedom to display competing search ads.” But the decision announced Wednesday prohibits the company from introducing any such ad restrictions in the future, while opening the door for Google to face lawsuits from “any person or business affected by its anti-competitive” tactics, the E.U. said.
“There was no reason for Google to include these restrictive clauses in their contracts except to keep rivals out of the market,” Vestager said at her news conference.
The Google fine is the European Union’s latest broadside against the tech industry. Vestager previously has acknowledged an ongoing antitrust investigation against Amazon, and earlier this month, she said the inquiry is in a “quite advanced” stage. (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
Music-streaming site Spotify, meanwhile, has urged European regulators to take similar aim at Apple, alleging last week that the iPhone giant has an “unfair advantage” because of the subscription-related fees it charges certain app makers. Individual European countries — emboldened with tough online privacy laws that took effect last year — also have set their sights on Silicon Valley. A key regulatory agency in Ireland recently confirmed it has opened 10 investigations into Facebook and its data-collection practices.
Google could face additional penalties in the European Union, where Vestager — who has emerged as one of Silicon Valley’s toughest regulators — is set to finish her term as competition commissioner at the end of October. Regulators recently have started scrutinizing Google’s handling of local search results, following a complaint brought by Yelp last year.
“We’re still looking into the search market for jobs and the search market for locals,” Vestager said Wednesday. “We keep getting complaints from people who are concerned about how these markets work.”