The European Union has launched a formal antitrust investigation into Alphabet’s Google, after the European Commission, its main antitrust enforcer, probed the issue informally since at least 2019. The formal investigation will examine numerous allegedly anticompetitive practices involving how the tech giant brokers ads and shares user data with advertisers across websites and mobile apps. In addition to reviewing issues covered by U.S. states, such as Google favoring its own ad-buying tools, the probe will cover new territory.
The Wall Street Journal reports that includes “Google’s alleged exclusion of competitors from brokering ad buys on Google-owned video site YouTube … [as well as] Google’s plans to block certain kinds of user-tracking technologies on its platforms, such as the Chrome browser and Android mobile operating system.”
“Online advertising services are at the heart of how Google and publishers monetize their online services,” said European Commission executive vice president Margrethe Vestager. “We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.”
WSJ notes that, “if the Commission finds evidence of wrongdoing, it can then file formal charges that could lead to fines of up to 10 percent of a company’s global annual revenue and orders to change behavior,” but adds that it “could also close the case without charges.” The Commission previously fined Google $9 billion for antitrust decisions between 2015 and 2018, but critics pointed out that hasn’t impacted the company which, in 2020, “increased net profit 17 percent … to $40.27 billion.”
This probe will take “the broadest look yet” at Google’s ad sales brokering, “a complex sector that accounted for 13 percent of Alphabet’s $182.53 billion in revenue last year.” The EU “estimated the overall online display advertising business [there] to have totaled 20 billion euros, equivalent to $23.8 billion, in 2019, with a major role for Google as an intermediary.”
The Commission also stated that, “it would take into account privacy protections and the EU’s privacy law, GDPR, during its investigation.” “Competition law and data protection laws must work hand in hand to ensure that display advertising markets operate on a level playing field in which all market participants protect user privacy in the same manner,” it noted.
Also under investigation is “Google’s move, at the start of 2016, to require advertisers to buy ads on YouTube using Google ad tools rather than third-party tools.” “Every agency, every major marketer had to use Google,” said AppNexus co-founder and chief executive Brian O’Kelley, whose ad-tech company suffered from the decision. He added that, “regulators might need to order breakups of some tech companies because fines aren’t dissuasive” for such large companies as Google.
Additionally, the Commission is investigating Google’s statement that, “it would stop letting Android apps see users’ unique advertising identifiers if those users have opted out of targeted advertising.” Apple already made a similar move which is now “the subject of antitrust scrutiny.” “We will also be looking at Google’s policies on user tracking to make sure they are in line with fair competition,” said Vestager.