Google wins challenge against €1.49bn EU fine

European Commission “committed errors in assessment”

Google has won its challenge against a €1.49bn EU fine for restricting rival search ads

The action related to Google’s AdSense product which deliver ads to websites. The European Commission had claimed that between 2006 and 2016 Google abused its market dominance by inserting exclusivity clauses in its contracts with third-party websites to prevent these sites running ads sold by any service other than AdSense.

The commission said when it levied the fine in 2019 that that these restrictive clauses resulted in advertisers and website owners having less choice and consequently facing higher prices that would be passed on to consumers.

But the General Court said the commission “committed errors” when it assessed these clauses. The commission did not consider “all the relevant circumstance” concerning these clauses and how they defined the market.

In doing so the commission failed to demonstrate that Google's contracts deterred innovation, harmed consumers or helped the company hold on to and strengthen its dominant position in national online search advertising markets, it said in a statement

Because of this, it ruled the Commission did not establish "an abuse of dominant position."

The commission said in a brief statement that it “will carefully study the judgment and reflect on possible next steps.” This could include an appeal to the European Court of Justice.

Google said it changed its contracts in 2016 to remove the provisions in question, even before the commission imposed the fine.

“We are pleased that the court has recognised errors in the original decision and annulled the fine,” Google said in a statement. "We will review the full decision closely.”

It is an unusual legal win for Google. The tech giant has been hit with three antitrust fines amounting to more than €8bn in recent years. Last week Google lost a final challenge against one of those penalties for its shopping comparison service that also involved a hefty fine.

The company is also under legal scrutiny in the US, also relating to its ad model and allegations that Google’s dominance over adtech constitutes an illegal monopoly. The US Department of Justice is actively considering the possibility of breaking Google up as the only remedy to its dominance in the ad space.

British competition regulators this month accused the company of abusing its dominance in the country’s digital ad market and giving preference to its own services.