Two years after opening an investigation into Google’s anticompetitive practices in the digital advertising business, the European Commission formally accused Google of breaching EU antitrust rules. In a preliminary opinion released today, the Commission said that Google has been abusing its dominant position in the ad tech industry and made it difficult for other companies to compete on a fair ground.
In its press release, the European Commission pointed out that Google has been favoring its own ad exchange platform (AdX) in the ad selection auction run by its dominant publisher ad server DFP. Moreover, Google has also been giving AdX preferential treatment when its ad-buying tools (Google Ads and DV360) place bids on ad exchanges.
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“Google is active on both sides of the market with its publisher ad server and with its ad-buying tools and holds a dominant position on both ends. Furthermore, it operates the largest ad exchange. This leads to a situation of inherent conflicts of interest for Google,” the European Commission said today.
The EU Commission also added that a behavioral remedy is “likely to be ineffective,” which is why the antitrust regulator said that Google selling its ad tech business may be the only way to address its concerns. If the Commission does conclude at the end of its investigation that Google abused its dominance and infringed EU antitrust laws, the Commission can impose the company a fine of up to 10% of its annual turnover.
.@Google controls both sides of the #adtech market: sell & buy. We are concerned that it may have abused its dominance to favour its own #AdX platform. If confirmed, this is illegal. @EU_Commission might require Google to divest part of its services.https://t.co/6SwdoLlN8a pic.twitter.com/2rZok2BWYs
— Margrethe Vestager (@vestager) June 14, 2023
As Google makes most of its revenue from its ad tech business, being forced to sell it could have devastating consequences for the company. In a statement shared with The Verge, Dan Taylor, Google’s VP of global ads criticized the preliminary conclusions of the EU Commission and said that the company was preparing its response.
“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” said Taylor in a statement. “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,” the exec said.