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EU slaps Google with antitrust charges over ad tech policies


The European Union on Wednesday charged Google with an antitrust complaint over its advertising technology, known industry-wide as adtech.

The European Commission — the EU’s executive arm — reached a preliminary conclusion that Google has “distorted competition in the advertising technology industry” in Europe by “favoring its own online display advertising technology services to the detriment of competing providers,” according to the commission’s statement.

“Since at least 2014,” the tech behemoth has been championing its own ads — both how they’re purchased and how they’re published on websites and mobile apps.

“Google has a very strong market position in the online advertising technology sector. It collects users’ data, it sells advertising space, and it acts as an online advertising intermediary. So Google is present at almost all levels of the so-called adtech supply chain,” EU’s competition chief Margrethe Vestager said in the statement.

She added that Google’s alleged favoring of its own intermediation services “harmed Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs.”


The EU’s competition chief, Margrethe Vestager, said Google has allegedly harmed its competitors and increased advertisers’ costs by favoring its own advertising technology, thus violating Europe’s antitrust laws.
AFP via Getty Images

Google’s corporate parent, Alphabet, will now have a chance to respond to the commission’s allegations in writing, and can request an oral hearing to present its case to EU representatives.

Should Google be found guilty of violating Europe’s antitrust laws, they can be fined “up to 10% of the company’s annual worldwide turnover.”

According to Statista, Google’s total revenue in 2022 was $279.8 billion — 80% of which is digital advertising revenue — meaning the fine could amount to the tune of $27.9 billion.

The commission suggested “structural remedies” to address the antitrust concerns, which included divvying up Google’s adtech business model in a way that complies with competition rules in the bloc.

Dan Taylor, Google’s vice president of global ads, said in an emailed statement to The Post that “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.”

“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,” he added.

Shares of Alphabet fell 0.35% in premarket trade on Wednesday.

The slate of charges marks yet another regulatory setback for Alphabet, which has also faced major antitrust actions in the US aimed at various segments of its business empire.

In January, the Justice Department and eight states filed suit against Alphabet’s search engine for allegedly monopolizing the digital advertising market.

As of April, 17 states had joined the Justice Department’s antitrust division in a federal lawsuit accusing Google of holding a monopoly over adtech.

The lawsuit alleges that Google uses “anticompetitive, exclusionary and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”


Google logo illustration with broken glass over it
If found guilty of violating the EU’s antitrust laws, Google could owe nearly $30 billion in damages.
REUTERS

The feds are also probing the company’s Google Maps business and whether it stifled competition by requiring app developers to use its map and search products within its terms of service.

Meanwhile, in Europe, Google has already been hit with three penalties worth $8.6 billion since 2017.

The sum included a record fine of more than $4 billion over Google’s business practices relating to its Android operating system. Google is still challenging that penalty in court.



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