EU Court Rules Google’s €1.49bn Fine Should Be Annulled

Alphabet’s Google has been handed some welcome news from a European court, after a stinging defeat last week.

The EU’S General Court in Luxembourg announced on Wednesday that it “upholds the majority of the Commission’s findings but annuls the decision by which the Commission imposed a fine of almost €1.5 billion on Google…”

In March 2019 Google had been slapped with a hefty financial penalty from European antitrust regulators over its AdSense advertising service. Google was ordered to pay €1.49bn (£1.26bn or $1.66bn).

AdSense fine

The AdSense investigation had begun in 2016 when the Commission accused Google of utilising restrictive clauses in its AdSense contracts with third-party websites, which had prevented Google’s rivals from placing their search adverts on these websites between 2006 and 2016.

Google has since changed its AdSense contracts with large third parties, to give them the ability to display competing search ads.

Google appealed the EU fine – like it had with it’s other EU antitrust fines that totalled a whooping €8.2bn.

Google in 2017 had been fined 2.4bn euros (£2.01bn) after the Commission ruled that Google had thwarted rivals of shopping comparison websites.

Then in July 2018 the European Commission fined Google a record 4.3 billion euros (£3.83bn) for commercial practices related to its Android mobile operating system, the world’s highest ever antitrust penalty.

This was followed by the €1.49bn AdSense fine in 2019.

General Court ruling

It is fair to say that Google has experienced a number of antitrust setbacks in the EU.

Last week the Court of Justice of the European Union (CJEU) overruled Google’s last ditch attempt to overturn the 2017 €2.4bn fine for abuse of its shopping comparison service.

But there was better news this week, after the lower General Court ruled that the 2019 AdSense fine should be annulled.

“The General Court upholds the majority of the Commission’s findings but annuls the decision by which the Commission imposed a fine of almost €1.5 billion on Google, on the ground inter alia that it failed to take into consideration all the relevant circumstances in its assessment of the duration of the contract clauses that the Commission had deemed abusive,” the lower court ruled.

It should that Google has operated since 2003 an advertising platform called AdSense, but in 2010 “an initial German undertaking lodged a complaint with the German Federal Cartel Office, which was transferred to the European Commission.”

“By today’s judgement, the General Court, after having upheld the majority of the Commission’s findings, concludes that that institution committed errors in its assessment of the duration of the clauses at issue, as well as of the market covered by them in 2016,” the lower court stated.

Next steps

Alphabet’s Google welcomed the lower court’s ruling.

“We made changes to our contracts in 2016 to remove the relevant provisions, even before the Commission’s decision. We are pleased that the court has recognised errors in the original decision and annulled the fine,” Google told Reuters in an email.

The Commission can appeal this ruling to the EU Court of Justice (CJEU).

The Commission reportedly said it would study the judgement and reflect on possible next steps.