EU Fines Google $1.7 Billion for Unfair Advertising Practices

Google was accused of forcing customers of its AdSense ad platform to turn down advertising from its rivals.

Google has been fined $1.7 billion by the EU for unfair advertising practices.

(Photo: AP)

Just a day after Google announced its gaming platform, the American tech giant has been slapped a fine of $1.7 billion by the European Union (EU) over violations in the online advertising market and restrictive contracts it imposed on its customers via its AdSense business.

According to The Verge, EU antitrust commissioner Margrethe Vestager said that Google had blatantly abused its dominant position in the market. According to Vestager, Google had been forcing customers of its AdSense advertising platform to turn down advertising from Google’s rivals.

This is the third largest fine by the EU that Google has been hit with.

Just last year, Google had been fined a whopping €4.3 billion for abusing its market dominance in the Android mobile space while the year before that, Google had been fined €2.4 billion for manipulating shopping search results. Currently, Google is appealing both cases.

The officials at EU said that from the year 2006 and onwards, Google prevented AdSense customers from having rival search engines on their websites.

AdSense allows customers including retail sites, news portals, etc to place a Google search box on the site. Subsequently, when users used the search engine, Google displayed the relevant ads and split the commission with the website owner.

Originally, customers of AdSense were not permitted to have rival search engines other than Google’s. It was in 2009 that Google gave permission for the inclusion of rival search engines as long as Google’s own search box had more of the spotlight.

Then, in 2016, the tech company removed these stipulations completely.

The AdSense platform was at a point in time a steady earner for the company, but was never considered a to be a major part of the company's overall revenue. A Bloomberg report cited that AdSense was responsible for less than 20 percent of Google's income in 2015. It has been declining ever since.

This penalty brings to the end EU's probe into the matter. However, the organisation is still keeping a close eye in other areas of Google's business and might open a new charge against the company if necessary.