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EU Commission fines Google €1.49 billion for abusive practices in online advertising

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The European Commission has fined Google €1.49 billion for breaching EU antitrust rules. Google has abused its market dominance by imposing a number of restrictive clauses in contracts with third-party websites which prevented Google’s rivals from placing their search adverts on these websites.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Today the Commission has fined Google €1.49 billion for illegal misuse of its dominant position in the market for the brokering of online search adverts. Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites. This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate – and consumers the benefits of competition.”

Google’s strategy for online search advertising intermediation

Websites such as newspaper websites, blogs or travel sites aggregators often have a search function embedded. When a user searches using this search function, the website delivers both search results and search adverts, which appear alongside the search result.

Through AdSense for Search, Google provides these search adverts to owners of “publisher” websites. Google is an intermediary, like an advertising broker, between advertisers and website owners that want to profit from the space around their search results pages. Therefore, AdSense for Search works as an online search advertising intermediation platform.

Google was by far the strongest player in online search advertising intermediation in the European Economic Area (EEA), with a market share above 70% from 2006 to 2016. In 2016 Google also held market shares generally above 90% in the national markets for general search and above 75% in most of the national markets for online search advertising, where it is present with its flagship product, the Google search engine, which provides search results to consumers.

It is not possible for competitors in online search advertising such as Microsoft and Yahoo to sell advertising space in Google’s own search engine results pages. Therefore, third-party websites represent an important entry point for these other suppliers of online search advertising intermediation services to grow their business and try to compete with Google.

Google’s provision of online search advertising intermediation services to the most commercially important publishers took place via agreements that were individually negotiated. The Commission has reviewed hundreds of such agreements in the course of its investigation and found that:

Starting in 2006, Google included exclusivity clauses in its contracts. This meant that publishers were prohibited from placing any search adverts from competitors on their search results pages. The decision concerns publishers whose agreements with Google required such exclusivity for all their websites.

As of March 2009, Google gradually began replacing the exclusivity clauses with so-called “Premium Placement” clauses. These required publishers to reserve the most profitable space on their search results pages for Google’s adverts and request a minimum number of Google adverts. As a result, Google’s competitorswere prevented from placing their search adverts in the most visible and clicked on parts of the websites’ search results pages.

As of March 2009, Google also included clauses requiring publishers to seek written approval from Google before making changes to the way in which any rival adverts were displayed. This meant that Google could control how attractive, and therefore clicked on, competing search adverts could be.

Therefore, Google first imposed an exclusive supply obligation, which prevented competitors from placing any search adverts on the commercially most significant websites. Then, Google introduced what it called its “relaxed exclusivity” strategy aimed at reserving for its own search adverts the most valuable positions and at controlling competing adverts’ performance.

Google’s practices covered over half the market by turnover throughout most of the period. Google’s rivals were not able to compete on the merits, either because there was an outright prohibition for them to appear on publisher websites or because Google reserved for itself by far the most valuable commercial space on those websites, while at the same time controlling how rival search adverts could appear.

Breach of EU antitrust rules

Google’s practices amount to an abuse of Google’s dominant position in the online search advertising intermediation market by preventing competition on the merits.

Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets.

Today’s decision concludes that Google is dominant in the market for online search advertising intermediation in the EEA since at least 2006. This is based in particular on Google’s very high market shares, exceeding 85% for most of the period. The market is also characterised by high barriers to entry. These include very significant initial and ongoing investments required to develop and maintain general search technology, a search advertising platform, and a sufficiently large portfolio of both publishers and advertisers.

Google has abused this market dominance by preventing rivals from competing in the online search advertising intermediation market.

Based on a broad range of evidence, the Commission found that Google’s conduct harmed competition and consumers, and stifled innovation. Google’s rivals were unable to grow and offer alternative online search advertising intermediation services to those of Google. As a result, owners of websites had limited options for monetizing space on these websites and were forced to rely almost solely on Google.

Google did not demonstrate that the clauses created any efficiencies capable of justifying its practices.

Consequences of the Decision

The Commission’s fine of €1 494 459 000 (1.29% of Google’s turnover in 2018) takes account of the duration and gravity of the infringement. In accordance with the Commission’s 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google’s revenue from online search advertising intermediation in the EEA.

Google ceased the illegal practices a few months after the Commission issued in July 2016a Statement of Objections concerning this case. The decision requires Google to, at a minimum, stop its illegal conduct, to the extent it has not already done so, and to refrain from any measure that has the same or equivalent object or effect.

Finally, Google is also liable to face civil actions for damages that can be brought before the courts of the Member States by any person or business affected by its anti-competitive behaviour. The new EU Antitrust Damages Directive makes it easier for victims of anti-competitive practices to obtain damages.

Other Google cases

In June 2017, the Commission fined Google €2.42 billion for abusing its dominance as a search engine by giving an illegal advantage to Google’s own comparison shopping service.

In July 2018, the Commission fined Google €4.34 billion for illegal practices regarding Android mobile devices to strengthen the dominance of Google’s search engine.

Background

Today’s decision is addressed to Google LLC (previously Google Inc.) and Alphabet Inc., Google’s parent company.

The Commission’s investigation into the conduct covered by the present decision began as part of the broader Google Search investigation (case 39740).

On 14 July 2016, the Commission sent a Statement of Objections to Google setting out its preliminary views that the company had abused its dominant position by artificially restricting the possibility of third party websites to display search advertisements from Google’s competitors.

Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement prohibit the abuse of a dominant position.

Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget. This money is not earmarked for particular expenses, but Member States’ contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers.

More information on today’s decision is available on the Commission’s competition website in the public case register under the case number 40411.

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In Afghanistan, women take their lives out of desperation

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Seven-year-old Ayesha is the sole survivor of her family after a devastating earthquake struck the central region of Afghanistan and destroyed her home. © UNICEF/Ali Nazari

The situation for women is so desperate in Afghanistan that they are committing suicide at a rate of one or two every day, the Human Rights Council has heard.

It comes as the top UN rights forum in Geneva agreed to Member States’ request for a rare Urgent Debate on the issue this Friday.

Addressing the Council, Fawzia Koofi, former deputy speaker of the Afghan Parliament, said lack of opportunity and ailing mental health, was taking a terrible toll: “Every day there is at least one or two women who commit suicide for the lack of opportunity, for the mental health, for the pressure they receive.

“The fact that girls as young as nine years old are being sold, not only because of economic pressure, but because of the fact that there is no hope for them, for their family, it is not normal.”

Bachelet highlights ‘progressive exclusion’

Echoing widespread international concern for ordinary Afghans, UN human rights chief Michelle Bachelet condemned the massive unemployment of women, the restrictions placed on the way they dress, and their access on basic services.

Women-owned and operated businesses have been shut down, Ms. Bachelet added, saying that 1.2 million girls no longer have access to secondary education, in line with a decision by the de facto authorities who took power in August 2021.

“The de facto authorities I met with during my visit in March this year, said they would honour their human rights obligations as far as [being] in line with Sharia law.

“Yet despite these assurances, we are witnessing the progressive exclusion of women and girls from the public sphere and their institutionalised, systematic oppression”.

Ms. Bachelet encouraged the re-establishment of an independent mechanism to receive complaints from the public and protect victims of gender-based violence.

“Beyond being right, it is also a matter of practical necessity”, said the High Commissioner. “Amid the economic crisis, women’s contribution to economic activity is indispensable, which itself requires access to education, and freedom of movement and from violence”.

Women made ‘invisible’

Also speaking at the Human Rights Council, its Special Rapporteur for Human Rights in Afghanistan, Richard Bennett, described a chilling attempt by the Taliban to make women “invisible, by excluding them almost entirely from society”.]

As an example of the de facto authorities’ intentions to impose “absolute gender discrimination”, the independent rights expert also noted that women are now represented by men at Kabul’s Loya Jirga, or grand assembly of religious scholars and elders.

Such measures contravene Afghanistan’s obligations under numerous human rights treaties to which it is a State party, Mr. Bennett insisted before adding that the situation for women “massively diminish(ed) women’s lives, deliberately attack women and girls’ autonomy, freedom and dignity, and create a culture of impunity for domestic violence, child marriage and sale and trafficking of girls, to name but a few of the consequences”.

Promises broken

Despite public assurances from the Taliban to respect women and girls’ rights, they are reinstituting step by step the discrimination against women and girls. Said Ms. Koofi, a former member of the peace negotiation team with the Taliban said that the fundamentalists “obviously have not kept their promises of what they were telling us during the negotiations, in terms of their respect for Islamic rights for women”.

Ms. Koofi added that “in fact, what they do is in contradiction to Islam. Our beautiful religion starts with reading. But today, Taliban under the name of the same religion, deprive 55 percent of the society from going to school”.

Afghanistan’s response

For Nasir Andisha, Ambassador and Permanent Representative of Afghanistan to the UN in Geneva, “the situation of women and girls in Afghanistan demands nothing less than a robust monitoring mechanism to collect, consolidate, and analyse evidence of violations, to document and verify information, to identify those responsible to promote accountability and remedies for victims, and to make recommendations for effective prevention for future violations”.

A draft resolution on the situation of women and girls in Afghanistan is being negotiated at the Human Rights Council and will be considered on 7 July.

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Safer roads, a global development challenge for all

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Every 24 seconds someone is killed in traffic, making safety on the world’s roads a global development challenge for all societies, especially for the most vulnerable, a senior UN official has said, ahead of the first ever High-level General Assembly Meeting on Improving Road Safety. 

Nneka Henry, who heads the United Nations Road Safety Fund (UNRSF) Secretariat, noted that 500 children die in crashes every day, and that of the older population, women are 17 times more likely to be killed during a car crash than men, even when wearing seatbelts. 

Challenge for all 

Despite these statistics, road safety is not just a challenge for women or for young people. It is “for each and every one of us who walk, ride, cycle or drive on our roads,” Ms. Henry told Diedra Sealey, a young diplomat in the President of the General Assembly’s HOPE Fellowship programme. 

The interview took place ahead of the High-level Meeting of the General Assembly on Improving Road Safety, which gets underway at UN Headquarters in New York on Thursday and Friday, organized by the President of the General Assembly, Abdulla Shahid, and the World Health Organization (WHO).  

Coinciding with the meeting, is the UN Road Safety Fund pledging conference. The Fund was established in 2018 with a vision to “to build a world where roads are safe for every road user, everywhere.” It specially finances projects in low- and middle- income countries, where some 93 per cent of road deaths and injuries take place. 

“I am here in New York to remind all 193 Member States of their commitment to the Fund’s mandate and success,” Ms. Henry said.  

Those successes include the announcement that as of 1 July, all vehicles imported in East Africa need to be below the Euro 4/IV emission standard and no more than eight years old. 

The Fund has been working with the Economic Community of West African States’ 15 members, to harmonize vehicle standard resolutions.  

Major benefits 

“This will have major air quality and road safety benefits,” Ms. Henry said about the latest announcement.  

Some of the other achievements by the Fund include legislation in Azerbaijan to help emergency post-crash response, help to increase enforcement of the speed limits and other road traffic rules in Brazil and Jordan, as well as improving data collection in Cote d’Ivoire and Senegal, and training urban planners on making safer school zones in Paraguay.  

Vision for the future 

As part of the High-level meeting this week, UN Member States will adopt a political declaration, to lay out a “vision for the future of mobility as one that promotes health and well-being, protects the environment, and benefits all people,” according to a press release. 

The interconnected targets are part of the Sustainable Development Goals (SDGs) that show how road safety is also integrated into the SDGs, from allowing safer access to education, to allowing people access to groceries and reducing carbon emissions into the atmosphere. 

Halving traffic deaths and injuries by 2030 is a target under the third SDG, on good health and well-being. 

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Rise of disinformation a symptom of ‘global diseases’ undermining public trust

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Societies everywhere are beset by “global diseases” including systemic inequality which have helped fuel a rise in disinformation, or the deliberate spreading of falsehoods, said the UN human rights chief on Tuesday, addressing the Human Rights Council in Geneva.

Michelle Bachelet said the restoration of public trust was essential, as disinformation should really be seen as a symptom of diseases such as systemic inequality, which has seen “deep-seated discrimination” flourish, along with fragile institutions, a loss of trust in effective governance, and “limited rule of law”.

She said those countries impacted by inequality were now threatened with instability and frayed co-existence within society.

Flourishing amid discontent

“Disinformation spreads when people feel that their voices are not heard. It arises in contexts where political disenchantment, economic disparity or social unrest flourish”, she said.

“It flourishes when civil society, journalists, human rights defenders and scientists cannot work, assemble and speak freely. When civic space is limited or closed. When the human rights to freedom of expression and access to information are threatened.”

It can be fuelled by governments and public officials, potentially leading to hate crimes and violence.

But she warned governments against trying to “officially ordain what is false, and what is true, and then attach legal consequences to those determinations. Our human right to access and impart information, is not limited to only what is deemed by the State as ‘accurate’”.

She called for a focus on “assessing how communications are being revolutionized by technology and on unpacking who is responsible for what.

“We need to look at how best to contain the harms caused by disinformation, while addressing the underlying causes that give disinformation life and allow it to gain traction.”

She said the sheer speed and volume of information circulating online, meant that it could be easily manipulated, with campaigns using automatic tools, rapidly creating a “false impressions of broad popular support for or against certain ideas, or be used to counter and marginalise dissident voices and ideas.”

Organized disinformation campaigns are also being used to silence rights defenders, journalists, and minority voices, “and as a result of repeated attacks, women, minority communities and others can be deterred from participating in the public sphere.”

Fighting back

The international response has to be consistent with universal rights obligations, she warned.

“When we debate the best ways to respond, we need to understand that censorship is not only an ineffective medicine – it can actually harm the patient.” Freedom of expression and the right to access information are essential, she underscored.

“I therefore call on States to uphold their international obligation to promote and protect these rights, whatever the social ill they seek to mitigate. Maintaining a vibrant and pluralistic civic space will be crucial in this endeavour.”

She called for policies which support independent journalism, pluralism in media, and digital literacy, which can help citizens “navigate” the online world and boost critical thinking.

“States must also ensure wide and free access to information so that it reaches all communities and constituencies…Trust can never be achieved without genuine government transparency.”

Social media regulation ‘insufficient’

The human rights chief said that social media businesses have transformed the way information circulates, “and they have a clear role to play.”

“To start with, we must understand better how they affect our national and global debates. While platforms have taken welcome steps to enhance their own transparency, and redress channels, progress remains insufficient.

She called for independent auditing of social media companies’ services and operations, and more clarity on the way advertising and personal data is being handled.

“And we need access for researchers and others to the data within companies, that can help us better understand and address disinformation.”

Two steps

Ms. Bachelet told the Human Rights Council that there are two “critical needs” in the battle against rising disinformation.

First, we need to deepen our understanding and knowledge: we need more research on how the digital sphere has transformed media and information flows; on how best to build public trust within this environment; and on how different actors can contribute to countering disinformation operations.”

Secondly, she said all discussions had to be framed within human rights norms. “Shortcuts do not work here: censorship and broad content take-downs are an ineffective and dangerous response.”

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