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EU Fines Google EUR 1.49 Bln For Abusive Practices In Online Advertising

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The European Union on Wednesday ordered Alphabet Inc.'s (GOOG,GOOGL) Google to pay an antitrust fine of 1.49 billion euros for abusing its dominant position in the online search advertising intermediation market by preventing competition.

The European Commission, the antitrust regulator of the EU, noted that Google breached EU antitrust rules. This is the third antitrust fine by the EU against Google and it represents 1.29 percent of the tech giant's turnover in 2018.

The Commission said Wednesday that Google imposed several restrictive clauses in contracts with third-party websites that prevented the tech giant's rivals from placing their search advertisements on these websites. According to the Commission, Google's misconduct lasted over ten years.

Commissioner Margrethe Vestager, in charge of competition policy, said, "Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts. 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."

However, the Commission noted that Google ceased the illegal practices a few months after the regulator issued in July 2016 a statement of objections concerning this case.

According to the antitrust regulator, Google was by far the strongest player in online search advertising intermediation in the European Economic Area or EEA, with a market share above 70 percent from 2006 to 2016.

The Commission said it found that starting in 2006, Google included exclusivity clauses in its contracts, prohibiting publishers from placing any search adverts from Google's rivals on their search results pages.

Google gradually replaced the exclusivity clauses in 2009 with so-called "Premium Placement" clauses that required publishers to reserve the most profitable space on their search results pages for Google's ads.

In the same year, Google also included clauses requiring publishers to seek written approval from it before making changes on how rival ads were displayed.

In July 2018, the European Commission imposed a fine of 4.34 billion euros on Google for "illegally" using Android mobile devices to strengthen its dominance among Internet search engines.

Google was also fined 2.4 billion euros by the EU in 2017 for favoring its shopping service over competitors.

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