Google hit with $3.5B fine in EU over ad tech antitrust
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The European Union on Friday slapped Google with a whopping $3.5 billion (€2.95 billion) fine for illegally exploiting its dominance to undercut smaller competitors in the advertising technology industry.
Why it matters: The steep fine is the second major antitrust penalty to hit Google in the past week.
- On Tuesday, a U.S. federal judge ruled that Google must share valuable search data with its competitors, but avoided imposing harsher antitrust penalties on Google that would've forced it to spin off its popular Chrome browser or divest its Android operating system.
Of note: A U.S. federal court similarly ruled earlier this year that Google's dominance of the online advertising and ad-tech markets violates U.S. antitrust laws.
- A trial to determine which penalties the tech giant faces is expected to take place later this fall.
Catch up quick: In 2021, the European Commission opened a formal antitrust investigation into whether Google has abused its market position by favoring its own online display advertising technology.
- Its case, similar to the one waged against Google by the U.S. Justice Department, claims Google's several ad tech acquisitions gives it dominance in online advertising.
- It also argued Google's self-favoring practices make it harder for rival ad tech services to compete.
What they're saying: In a statement, the EU said that in addition to the fine, it ordered Google to bring "self-preferencing practices to an end" and to "implement measures to cease its inherent conflicts of interest along the adtech supply chain."
- Google, it said, has 60 days to inform the commission about how it intends to adhere to those requirements.
The other side: Lee-Anne Mulholland, vice president and global head of regulatory affairs at Google called the EU's decision "wrong" and said the tech giant will appeal the ruling.
- "It imposes an unjustified fine and requires changes that will hurt thousands of European businesses by making it harder for them to make money. There's nothing anticompetitive in providing services for ad buyers and sellers, and there are more alternatives to our services than ever before," she said.
Of note: President Trump threatened new tariffs on Europe over the fine, calling it "very unfair" in a Truth Social post.
The big picture: The fine marks the fourth major EU antitrust penalty on Google in less than a decade.
- European antitrust officials levied a $2.7 billion fine on Google in 2017 for abusing its search practices, more than double what was expected.
- They charged Google $5 billion in 2018 for abusing the dominance of Android. The penalty was upheld, although slightly reduced, last year after Google tried to appeal the ruling.
- In 2019, the commission charged Google $1.7 billion for abusing its advertising dominance in a different case.
Reality check: "The EU's $3.45 billion adtech fine against Google may sound steep, but for a company that we forecast to generate $223.16 billion in ad revenue next year, it's less a knockout punch than a regulatory shot across the bow," said Emarketer analyst Jeremy Goldman.
- "The real significance lies in what it signals: Brussels is willing to escalate from fines toward structural remedies, including potential divestitures of Google's ad tech stack."
Editor's note: This story has been updated with comments by President Trump.
