Some more bad news for Google. This time, the Adsense service is the focus of a €1.49 billion fine for anti-trust violations.
Google Adsense is a service that allows web developers to place ads on their site. In exchange, the website owners get some revenue for the traffic they pull in. It’s actually a pretty sweet deal because, otherwise, web administrators would have to broker deals individually with companies. That, of course, is an excessively large amount of work.
So, that is where ad networks come in. They basically do all the legwork of working with companies. Then, website owners can put in the blood sweat and tears of building a website that web users want to visit.
For a time, at least, web administrators had a small number of networks to choose from. One of those networks is Google’s Adsense service.
Unfortunately, as time went on, there were issues of malvertisements – where ads wound up delivering malware to unsuspecting users on unsuspecting website administrators properties. So, for a lot of people, advertisements quickly became a question of trust. Some ad networks weren’t necessarily keeping close tabs on who was placing those ads and what those ads contained. All that mattered was that money was being paid out in the end. Obviously, this is not an arrangement that would last forever. As a result, it may have contributed to website administrators gradually moving to Google. It’s a name recognition thing among others.
Of course, Google Adsense is one of many properties Google owns. Over time, the Adsense service became more and more powerful as more and more administrators wound up using it. At some point, some people are going to question whether or not anti-trust would become an issue.
In Europe, it became more than just a couple of people asking questions about it. In fact, regulators have even fined Google €1.49 billion for anti-trust violations. From Tech Crunch:
Speaking at a press conference today, EU competition commissioner Margrethe Vestager said the search giant — “by far the biggest” search ad broker in the region, with its AdSense platform taking a share in Europe of “well above 70% since 2006” — had engaged in illegal practices in order to “cement its dominant market position”.
“Today’s decision is about how Google abused its dominance to stop websites using brokers other than the AdSense platform,” said Vestager, noting that the Commission looked at more than 200 tailored agreements with major sites which use AdSense (aka “Google direct partners”) — finding at least one clause that harmed competition.
“There was no reason for Google to include these restrictive clauses in its contracts except to keep rivals out of the market,” she added, saying the Commission’s conclusion is that between 2006 and 2016 Google’s behavior was illegal under EU antitrust rules.
“It prevented its rivals from having a chance to innovate and to compete in the market on their merits.”
Vestager said the Commission found three types of anti-competitive restriction in Google’s contracts — including exclusivity provisions, which were included in contracts from 2006 and prevented “the most important partners from sourcing search ads from Google’s rivals on any of their websites”; and premium ad placement provisions which Google added to contracts from 2009 “to replace over time the existing explicit exclusivity provisions”, thereby not directly preventing partners from sourcing ads from Google but requiring they take a minimum of search ads from Google — “and put them in the most visible and most profitable parts of the page”.
This, of course, represents the latest setback for the search engine giant. Back in January, the search engine giant was also fined the equivalent of $57 million for its Adsense service violating Europe’s GDPR (General Data Protection Regulation) laws. That, of course, is a fine Google says it will appeal.
For Google’s part, they responded to TechCrunch with a statement that reads:
We’ve always agreed that healthy, thriving markets are in everyone’s interest. We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.
Over the last few years, there have been growing calls for large tech companies to be broken up. Those calls have been countered by those who say that maybe big banks, oil companies, telecommunications giants, and pharmaceutical companies (among others) should be broken up first. If anything, this latest development will no doubt add fuel to the fire for those calling for the breakup of what critics call “big tech”. At this stage, though, it seems unlikely that any major regulatory moves surrounding company breakups is going to happen, though.
Drew Wilson on Twitter: @icecube85 and Google+.
