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Google gets EU antitrust charges on ad tech business – POLITICO


Google may need to sell off part of its advertising business to prevent it from abusing its dominant position in the market and shutting out competitors, the European Commission said Wednesday as it sent antitrust charges to the search giant.

Google “may have abused its dominant position by favoring its own ad tech business,” antitrust Commissioner Margrethe Vestager said at a press conference on Wednesday.

The ad tech sector is “highly dynamic,” Vestager said, and “has changed a lot over the last 15 years.” She said Google was “pervasive” across the ad tech value chain and that offloading one part of its business could be “the only way to solve this.”

“We see no alternative so far at this stage of the investigation,” she added.

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“Should the Commission conclude that Google acted in an illegal manner,” Vestager said, it might order the company to “divest a part of [its] services,” such as its DoubleClick For Publishers or AdX services, and “by doing so, we will put an end to the conflict of interest.”

The Commission said in a statement of objections that Google is dominant in both ad publishing and buying and may have abused its position since 2014, favoring its own online display advertising technology services at the expense of competitors.

The antitrust enforcer said it was “concerned” that favoring its own ad exchange service and avoiding others gave Google a “competitive advantage and may have foreclosed” rivals, allowing it to charge higher prices for its services.

The fact that Google is active on both sides of the digital advertising market creates “inherent conflicts of interest,” the Commission said, adding that “only the mandatory divestment by Google of part of its services would address its competition concerns.”

The European Union’s competition watchdog has been probing Google’s online display advertising business since 2021. It’s previously probed the company’s shopping search service, its mobile phone software and advertising contracts, levying more than €8 billion in fines.

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Google’s advertising business is core to how it generates massive revenues: The company sells advertising space on websites, which funnels funding to website publishers, and also takes ads from advertisers.

When Google was fined by the French competition authority in 2021, it agreed to limit the data shared between both sides of that business. The U.S. Department of Justice earlier this year sued Google for monopolizing the “ad tech stack” that serves both publishers and advertisers.

“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector,” Dan Taylor, Google’s vice president of global ads, said in response to the Commission’s decision. “The Commission’s investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC’s view and we will respond accordingly.”

This article has been updated.

Edith Hancock

Published: 2023-06-14 16:22:59

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