Competition Authority Imposes €150 Million Penalty Google

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After the CNIL’s 50 million euros at the beginning of the year, it is now the turn of the Competition Authority to condemn Google for abuse of a dominant position. In addition to a financial penalty (€150 million), Google will have to clarify its rules and submit annual reports. The company has announced an appeal.

Google has abused its dominant position in the search advertising market by adopting rules for the operation of its opaque and difficult to understand Google Ads advertising platform and by applying them in an unfair and random manner ,” the Competition Authority said in a statement.

The result of this “Christmas present” with a bit of a head start: a €150 million sanction against the Internet giant, which must also ” clarify the drafting of the operating rules of Google Ads, as well as the procedure for suspending accounts”. It must also put in place measures to support its staff, annual reports must also be put in place and a summary of the decision must be published on the and homepages.

The President of the AdlC Isabelle de Silva, taken up by Reuters, judged that “is extremely important for the Authority since it is the first sanction decision concerning Google […]We are facing a domination such as we have very rarely seen in the history of the economy [ giving Google ]a power of life or death over certain small companies “.

History goes back to January 2015

The story is not new since its foundations date back to January 2015 when Google ” suspends without notice ” the AdWords account of Gibmedia, a company that publishes, among other things, paid news sites on weather, company data and telephone information.

Gibmedia had requested provisional measures, but these were rejected by the Authority in September 2015. The latter, however, announced that it was continuing its investigation on the merits. The AdlC offers a quick overview of the opaque functioning of Google Ads :

The evidence on the record shows that Google has behaved ambiguously in several respects: the rules laid down are themselves opaque and difficult to understand, and therefore leave it entirely to Google to interpret and amend them. In addition, there appears to be inconsistent application of this Policy: for example, some sites have been suspended by Google while others with similar content have been maintained. Finally, Google’s internal application of this Policy is also inconsistent, as some sites that were not following the Policy have been offered customized Google Ads services to enhance their exposure.

Given its dominant position, the Internet giant had to define the rules of its advertising platform ” in an objective, transparent and non-discriminatory manner “. According to the Competition Authority, Google accounts for more than 90% of searches in France and ” probably more than 80% in the market for online advertising linked to searches”. 

Double standards, Google “forgets” to notify customers

Here’s an example: ” In September 2014, Google considers, for example, that the paid site complies with its Rules for the Sale of Normally Free Services. However, in January 2015, without changing its Business model Google suspended the site.

The misunderstanding was so strong that Google’s support teams sometimes put their ” ” customers in danger of “” with regard to the rules. Other times, Google changes its rules, but forgets to inform its customers. The FCDA recalls that it had already singled out the company in the past in the Navx case examined in 2010. 

In some cases, Google is even unable to enforce a policy of equality among its customers: ” While it has, for example, suspended the accounts attached to the reverse directory sites published by Gibmedia, it has, at the same time, maintained those of its sister company – with similar content – and even supported its development. The Authority cites other examples of weather services.

Google has been “negligent at best, opportunistic at worst”

According to the investigation, Google did not have the will to implement a deliberate and global strategy that disrupted competition, but ” was at best negligent, at worst opportunistic, displaying consumer protection behaviour, while developing commercial offers to publishers of sites which Google itself considered dubious, with the aim of increasing investment in Google Ads “.

These practices have ” also harmed sites with low notoriety”. Natural referencing in this kind of case is long and the only real possibility offered to these sites to make themselves known is, in the vast majority of cases, paid referencing “, thus ads linked to Google searches.

150 million, but not only

In addition to a financial penalty of €150 million, the Competition Authority orders Google to :

  • to clarify the wording of the Rules of its advertising platform Google Ads and to review the procedures for informing about changes to the Rules (individual notification two months before the change of Rule);
  • to clarify the procedures for suspending accounts to avoid abrupt and unjustified suspensions;
  • establish procedures for alerting, preventing, detecting, and responding to breaches of its Rules, so that actions to suspend Google Ads sites or accounts are strictly necessary and proportionate to the goal of consumer protection. »

The company will thus have to organize every year a compulsory training of its staff in charge of accompanying customers on advertising. It must also present an annual report ” specifying in particular the number of complaints lodged against it by French Internet users the number of suspended sites and accounts, the nature of the rules violated and the terms of the suspension “.

Within two months, the company must submit a report to the AdlC detailing the measures it intends to take and those implemented within six months. 

Last but not least: ” The summary of the decision must be accessible via the Home page of the search engines and, for a period of one week “.

Google announces call

For its part, Google has announced that it will appeal this decision: ” Our users expect to be protected from misleading advertising and that is what our Advertising Terms of Use are all about,” as reported by Reuters.

It should be remembered that there has been a succession of convictions in recent years In January 2019, the CNIL imposed 50 million euros on the basis of the RGPD and following collective complaints filed by La Quadrature du Net and NOYB.

Brussels has not been idle either: 2.42 billion euros in June 2017 against the Search Engine 4.3 billion euros in July 2018 for abuse of a dominant position on Android and finally 1.49 billion euros in March 2019 on abusive online advertising practices.

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