The European Union (EU) antitrust commission has fined search engine giant Google $3.45 billion over anti-competitive practices in its adtech business. The fine, which came days after Google avoided divesting its Chrome browser, has seen strong tariff threats from President Donald Trump.
The commission, as cited by Reuters, noted that Google favoured its online display technology product, which helped its advertising exchange (AdX) role in the adtech supply industry. This allowed the company to charge high fees for the services at the detriment of its competitors and other online publishers, the commission explained.
In its verdict, the EU watchdog ordered Google to halt its anti-competitive practices and take appropriate measures. It also ordered the company to submit compliance plans within 60 days and provide an additional 30 days for implementation details.
“Digital markets exist to serve people and must be grounded in trust and fairness. And when markets fail, public institutions must act to prevent dominant players from abusing their power,” the commission said.
The commission is also planning to make Google divest part of its services. The enforcement of such an order depends on the company’s compliance report and implementation efforts. According to the watchdog, Google has been abusing its market power since 2014.
The $3.45 billion fine is the fourth that the Alphabet company has received from the EU antitrust commission. Google was hit by a record fine of €4.3 billion in 2018, €2.42 billion in 2017, and €1.49 billion in 2019.
Also Read: Google won’t sell Chrome afterall but is ordered to share search data with competitors.
Trump to retaliate with tariffs
The sanction on the United States company has now seen a harsh reaction from President Donald Trump. Reports noted that the EU commission has been trying to restrain its orders with concerns that the U.S. tariffs on European cars might soar.
The fine follows several trade tensions between major global powers and U.S. threats of retaliation over EU scrutiny of American tech firms.
In his reaction, President Trump termed the fine as “unfair” and “discriminatory”. He also vowed to personally take the matter up with the EU. Trump, who has hit Europe with trade tariffs, will likely retaliate with the same measures.
“We cannot let this happen to brilliant and unprecedented American Ingenuity and, if it does, I will be forced to start a Section 301 proceeding to nullify the unfair penalties being charged to these Taxpaying American Companies,” Trump said on his Truth Social post.
In addition, Section 301 of the Trade Act of 1974 allows the U.S. to penalise foreign countries that engage in acts that are “unjustifiable” or “unreasonable,” or burden U.S. commerce. With the fine now ditched, the EU is expected to face a new range of tariffs from the U.S.
“I will be speaking to the European Union,” Trump added.
Google set to appeal
The search engine giant has vowed to appeal the EU antitrust commission’s verdict.
Google’s Vice President, Global Head of Regulatory Affairs, Lee-Anne Mulholland, said that the decision is wrong and unjustifiable. She explained that the ruling 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 added.
However, the EU commission provided remedies for Google, such as potential divestitures, provided it is not ready to address the conflict of interest. The case represents another attempt by the EU to enforce a balanced situation where small companies can compete in a market dominated by the big techs.
The European Publishers Council, an arm that has been fueling the case, lamented the absence of a breakup order. It explained that the fine will go down as Google’s cost of business rather than restraining the company from unfair competition practices.
“A fine will not fix Google’s abuse of its adtech. Without strong and decisive enforcement, Google will simply write this off as a cost of business while consolidating its dominance in the AI era,” it said.
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