One of the EU's top courts has annulled a €1.5 billion fine against Google, imposed by the European Commission in 2019 for anti-competitive practices by the tech company's advertising platform AdSense.
In a ruling published on Wednesday, the General Court (Europe's court of first instance) upheld the "majority" of the Commission's findings against Google and its parent company Alphabet but annulled the heavy fine.
The case centres around Google's online advertising platform AdSense for Search (AFS) which allows website owners to display ads on their websites in return for a share of ad revenue.
However, Google's contracts with website owners contained clauses restricting or prohibiting the display of ads from services that competed with AFS.
Between 2010 and 2017, the European Commission received several complaints about the practice, including from Microsoft, Expedia and Deutsche Telekom.
Proceedings launched in 2016
In 2016, after the European Commission initiated proceedings related to three different types of clauses in Google's contracts, the tech company removed or amended the clauses being investigated.
Three years later, the European Commission found that Google had committed three separate infringements of EU competition law using these types of clauses, which it said when taken together, equate to a "single and continuous infringement" from January 2006 to September 2016. The Commission handed down a fine of €1.494 billion.
In its judgment on Wednesday, the EU's General Court annulled the fine, stating that the Commission made mistakes in assessing the duration of the clauses at issue, as well as the market covered by them in 2016.
Failure to prove abuse of dominant position or continuous infringement
The Court ruled that the Commission did not adequately show that the three clauses were an abuse of Google's dominant position in the online market, nor did it establish that, when lumped together, these clauses constituted a continuous infringement of competition law.
It was not proven that the clauses prevented competitors from accessing a "significant part" of the online search advertising market in the European Economic Area, nor did the Commission consider the fact that many of the clauses only lasted for a few years.
Furthermore, the Commission did not demonstrate that the clauses firstly deterred innovation, secondly helped Google to maintain and strengthen its dominant market position, or thirdly possibly harmed consumers.
A Google spokesperson said that the case is about a "very narrow subset of text-only search ads placed on a limited number of publishers’ websites".
"We made changes to our contracts in 2016 to remove the relevant provisions, even before the Commission's decision. We are pleased that the court has recognised errors in the original decision and annulled the fine. We will review the full decision closely," they told The Brussels Times.
The European Commission now has just over two months to decide whether to appeal the decision to the European Court of Justice.
Last week, the European Court of Justice upheld a separate €2.4 billion fine against Google for abusing its dominant position and squeezing out competition from rival shopping services.
