Google has been hit with a €1.49bn (£1.28bn) fine by the European Union after being accused of “illegal practices” in its advertising business. The fine relates to its use of AdSense technology to thwart competition for online ads between 2006 and 2016.
AdSense technology allows Google to advertise on third party websites in exchange for offering them a search box. However, Google included “exclusivity clauses” in some AdSense contracts which prevented publishers from placing ads from Google rivals on their search pages.
“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 EU antitrust chief Margrethe Vestager “This is illegal under EU anti-trust rules.” Google started to include exclusivity clauses in its contracts with publishers in 2006.
What is AdSense? In the early noughties Google noticed that there were plenty of businesses who had websites who would benefit from their ready-made advertising software. They offered a piece of code that could be plugged into the backend, and the website would start showing adverts to visitors. Google took a cut and the business did not have to pay someone to write bespoke code to do it themselves. Google was in control of those adverts, giving it significant sway in the market. It also offered a “search box” function that allowed visitors to the website to search it, similarly to how they might search Google. In return it would choose what advert links where placed at the top of those search results. Over time, website owners began to complain that they were unable to place adverts of their choosing and rival digital advertisers began to moan that the market was impenetrable as a result.