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EU closes in on Google as it prepares second antitrust fine

 

The EU is preparing to fine Google over its multi-billion dollar advertising empire as a high-profile investigation into its Android operating system is pushed back to next year.

Europe’s competition commissioner Margrethe Vestager is gearing up to hit the web giant with an antitrust penalty over AdSense, its powerful advertising network, with a decision expected in the next few weeks.

It will be the second fine in less than a year, after Google was ordered to pay €2.4bn (£2.1bn) in June for abusing its internet search monopoly to promote its online shopping service.

While June’s penalty was a record for a European competition case, it was merely the first in a hat-trick of antitrust investigations into Google. Last year the commission issued two further “statements of objection”, claiming the company attaches onerous requirements to the Android operating system, and that it ties websites that use AdSense to exclusivity arrangements that throttle competitors.

Google enjoys dominant positions in both markets, and any attempt to exploit this is seen as a breach of antitrust rules.

European competition commissioner Margrethe Vestager Credit: AFP

The commission was expected to fine Google over its Android mobile software this year, but according to Brussels sources the investigation has taken a back seat as EU officials go through extra rounds of due diligence, and is now likely to run into next year.

A fine for abusing the dominance of AdSense, the Google-run network of adverts that appear on other websites, is now likely to come first. The commission alleges that Google’s contracts with other websites broke competition law by preventing them from using other firms’ advertising networks within those websites’ search results.

The case is seen as particularly serious because it strikes at the heart of Google’s advertising business, which generates the vast majority of the company’s revenue.

It is unclear how large any fine will be, although it can be expected to run into hundreds of millions, if not billions of euros.

However, much of it relates to past conduct, which may mitigate any fine as well as any orders to change how it  operates.

The AdSense fine is seen as more straightforward than the Android case, which has a multitude of complainants and moving parts. Sources said the commission is poring over documents and demanding extra answers from complainants in order to make sure its case is watertight.

A recent EU court victory for Intel, which ordered that a €1.1bn antitrust fine from 2009 be re-assessed, is believed to have spooked the commission. “I’ve never seen them so careful,” said one source.

Google, which has fought back against antitrust allegations and appealed the June fine, did not comment. The company has previously said there is strong competition in advertising, and that it changed its policies before the commission raised objections.

The Android fine, when it comes, is expected to be a new record penalty for breaking antitrust law.

The fines are likely to create further divisions between Silicon Valley and Europe. Ms Vestager has previously fined Facebook for breaking competition law, and has demanded Apple and Amazon pay Ireland and Luxembourg respectively for years of uncollected taxes. A spokesman for the commission did not  comment.

  1. November 13, 2017 at 2:35 PM
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