Another year, another antitrust fight.
This year, we have seasoned veterans on stage – the EU vs. Google – an antitrust “El Clasico” that happens with frightening regularity.
Yesterday, European Commission hit Google with a record $5.1 Billion fine for “illegal practices regarding Android mobile devices to strengthen dominance of Google’s search engine.”
Why is the fine so big?
The sum is enormous even for Google and is almost double the amount Google was obliged to pay last year after it was determined that the company was favoring its own services in search results.
It looks like the EU grows annoyed with American tech giants and is ready for decisive actions to protect the European market.
Here are some of the most prominent milestones in Google’s EU antitrust battle, and, actually, the explanation why the penalty size is so significant:
December 2010 – The Commission claims that Google has breached competition rules by abusing its dominant position. “This includes directing users of its search engine to its own services, and reducing the visibility of competing websites.”
April 2015 – The Commission kicks off a probe into Google’s Android OS. FairSearch: “Google requires manufacturers using key apps on Android, such as Google Play or YouTube, to also install others that it specifies.”
July 2016 – The Commission issues a new complaint against Google regarding its monopoly in online advertising. EU Commission suspects that Google’s agreements with websites were preventing them from using other advertising networks.
June 2017 – Google fined €2.42 billion in the historic anti-monopoly decision, yet one more case over AdSense is waiting in the wings.
How exactly Google abused the market dominance?
The EU identified three key areas where Google abused its market dominance:
- Required manufacturers to pre-install its search engine and Chrome apps as a condition for licensing Google’s app store
- Exclusively pre-installed the Google Search app on Android devices
- Prevented manufactures from selling devices running on alternative versions of Android
What Google has to change?
The European Commission requires Google to bring its “illegal conduct to an end in an effective manner within 90 days of the decision.”
Naturally, Google is going to appeal the decision, but the changes are inevitable.
Will it affect advertisers and campaign targeting?
To find out how this decision would influence the digital advertising market, we turned to our experts.
Sergey Kozlov, Head of Research and Analytics
“I don’t see significant changes in the short term, mostly because this kind of decisions usually takes a long time to be implemented. But in the long-term, we would see a realignment of forces unfolding in the markets where there is a strong competition to Google.”
Arnis Augstmanis, Head of Marketing
“Short-term? It’s unlikely, but in the longer perspective, it might force lasting changes to the smartphone market. As I anticipate, it should contribute to more diversity in browser choice. If the position of Chrome would be shaken, we could also see changes in AdBlock policies that are pushed by Google. Let’s wait for the upcoming battles in AdTech.”
Alexander Vasekin, Business Owner
“First of all, it will undoubtedly take a really long time for the process to be finalized as Google has already announced that they will appeal. Even if the EU decision is definite and remains unchanged, we can’t expect to see an immediate effect. Manufacturers have to adapt, competitors have to strengthen their positions, and most importantly, consumers need to explore new options.
All in all, it’s way too early for advertisers to alter their strategies. Observe and analyze customer sentiment – it’s the best you can do.”