EU Fines Google $3.5 billion for Antitrust Violations

Action: The European Commission has fined Google $3.5 billion for violating EU antitrust rules by favoring its own ad-technology services in online advertising (e.g., banner ads) over those of rival services. The Commission’s order directs Google to stop these practices and within 60 days identify measures to address its conflicts of interest in the adtech supply chain. The Commission will then evaluate whether these changes are sufficient to address the violations and may pursue more aggressive measures, including forced divestment.  

Trusted Insights for What's Ahead^®

• Both the US and EU have investigated alleged market dominance by US tech companies.
• For example, the US Justice Department and several states filed a case in 2020 alleging that Google illegally monopolized the search engine market by, among other things, paying billions of dollars to be the default search engine in web browsers. While the government had sought significant changes to Google’s business, in the latest development, Judge Amit P. Mehta of the US District Court for the District of Columbia recently ruled favoring more modest remedies than the forced sale of the Chrome browser, including requiring that Google share more search data with rival companies and end the practice of entering into exclusivity agreements with distributors for its products.   
• In a separate case, Judge Leonie Brinkema of the US District Court for the Eastern District of Virginia determined that Google maintains a monopoly in some online advertising technology. Proceedings over potential remedies are scheduled to begin later this month.   
• At the same time, EU regulation of US tech companies has been a point of friction with the current Administration, which has stated that regulations “that dictate how American companies interact with consumers” in the EU “will face scrutiny” and “violate American sovereignty.”
• The Administration has threatened retaliatory tariffs and other trade actions in response to actions that it views as foreign overreach against US companies. Indeed, press reports suggest that the EU’s trade commissioner sought to prevent the Commission from issuing its penalty.
• The EU has issued significant fines to Google in recent years due to concerns about its market dominance, including a $5.14 billion fine in 2018 related to its Android devices and a $2.9 billion fine in 2017 related to its comparison-shopping tool.