Google fined $1 bn (over Rs 7,000 cr) in France within a year

Dr M.Rahman, Associate Professor, Galgotias University

 In less than a year, Google has been fined thrice with a total amount close to $1 bn (Rs 7260 cr) in France. The fine imposed on Google is nothing new as there are a series of fines imposed on Google by competition watchdogs of European Union and various other nations including India, USA, Italy etc. for adopting unfair business practices. Was Google fined in France thrice for political reasons or for adopting unfair business practices or something else? This article will let you know the reasons behind the penalties imposed on Google in France.


Hey guys! What is the right answer to the question:

Can the tech giant ‘Google’ adopt unfair, biased online business practices?

Most of you might say ‘No’ as you love using Google products like gmail, Google search, Google play store, Google map, Youtube etc. on daily basis. And, I am damn sure Google too love you as a ‘user’ because you provide the tech giant with valuable data on your online behavior, that’s useful for its businesses.

But, the competition regulators/anti-trust agencies of France and many other nations do not agree with your opinion. If it’s ‘NO’

The regulators/agencies of multiple nations including France, India, Italy, USA etc. after thorough investigations found that Google was indulged in unfair online business practices for which it has already been fined over $10 bn (over Rs 70,000 cr). Moreover, the anti-trust regulators of many countries including Australia, Germany etc. have been investigating Google’s business practices further, especially online search and advertising practices. If found guilty, massive penalties could be imposed on Google in future.

Reasons behind $1 bn fine imposed on Google in France

Google has been fined thrice with a total amount close to $1 bn (Rs 7,260 cr) in less than a year time period for unfair business practices, as shown in Table 1 (all calculations are based on exchange rate at the particular time), by French competition regulators. Many persons may not be aware of this fact that a tech giant like Google earning huge annual profit of $40 bn, and whose services are used and loved by billions on daily basis across the globe can adopt such practices.



Recently on July 13, 2021, France’s competition regulator fined Google $592 million(Rs 4,410 cr) over a dispute with French publishers who wanted the company to pay for the use of their news content. Not paying publishers or new agencies amounts to unfair business practice on part of Google. The regulator had issued orders to Google earlier this year to hold talks within three months with news publishers and finalize the deal. But, Google failed to do so and hence fined for breaching those orders. The agency threatened fines of another $1 million (around Rs 75 cr) per day if Google doesn’t come up with proposals within two months on how it will compensate publishers and news agencies for their news content.

Just a month ago, in the first week of June, 2021, France’s competition regulator had fined Google $267 million (approx Rs 2,000 crores) after it found that Google had abused its dominant market position for placing online ads. The penalty is part of a settlement reached after three large media groups ( publishers) — US based News Corp, French daily Le Figaro, and Belgium’s Groupe Rossel — had complained in 2019 that Google was promoting and giving preferences to its own services at the expense of their ad revenues of their websites and apps.

These large media groups/publishers including News Corp alleged that Google preferred its own ad exchange, Google Adx as compared to other non-Google Ad exchanges from where these publishers could have earned more money in the programmatic advertising process as mentioned in the above figure.
(Note: Programmatic advertising is an online form of advertising for automated buying and selling of online advertising space in real time through an ad exchange, a software-based automated marketplace that allows publishers to sell their ad inventory and advertisers to bid on and purchase the inventory in real time)

The regulator’s investigation confirmed that Google had developed its complex algorithm in such an unfair manner that it gave preferential treatment to its own services (Google AdX and ad networks) as compared to other’s services in the advertising process.

Google has already accepted to pay the fine of $267 mn (approx Rs 2,000 cr) and announced that it would make changes to its advertising practices. It indicates everything was not fair behind the complex algorithm in the world of Google’s digital advertising.

In Dec 2020 too, Google was fined in France. The French data regulatory body CNIL, had fined Google $121 million (approx Rs 900 cr) for breaching the country’s rules on advertising cookies. The regulatory body CNIL found that Google did not request prior consent from internet users about trackers, or cookies, that were automatically saved on computers for advertising purposes. Moreover, Google also failed to provide clear information to users about the purposes of these cookies and how they might refuse them. These were gross unfair business practices on the part of Google.

Conclusion

Based on the above facts and findings, it can be concluded that Google was penalized for unfair business practices in all the three instances. The tech giant need to adopt fair practices proactively and take care of the interests of all stakeholders for maintaining its growth and reputation in the rapidly growing digital world.

References

1. https://www.npr.org/2021/07/13/1015596060/france-fines-google-592m-in-a-dispute-over-paying-news-publishers-for-content
2. https://www.trtworld.com/europe/france-watchdog-fines-google-267m-for-favouring-own-ads-over-rivals-47314

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