BRUSSELS: The European Commission has accused Google of abusing its dominant position in the online advertising market and has recommended that the US company sell a portion of its ad services to ensure fair competition. The preliminary finding comes after a two-year anti-trust probe, and Google has been invited to respond before a definitive conclusion is reached.
If the commission maintains its view after further review, it has the authority to impose a fine of up to 10 percent of Google’s annual global revenues. In response to the accusations, Google’s vice president for global ads, Dan Taylor, issued an immediate statement expressing disagreement with the commission’s announcement and stating that Google would respond accordingly.
Dan Taylor emphasized Google’s commitment to creating value for advertisers in a highly competitive market, noting that the commission’s investigation focused on a narrow aspect of their advertising business.
Google, a subsidiary of US tech giant Alphabet, reported worldwide revenues of $76 billion in the last three months of 2022. Margrethe Vestager, Commission Vice President responsible for anti-trust activities, expressed concerns that Google may have illegally distorted competition in the online advertising industry, also known as adtech. Vestager clarified that the commission has not yet made a final conclusion and is awaiting Google’s response.
Google’s Dominant Position in Online Ads
Although the commission has not asked for divestiture at this stage, its preliminary view suggests that divestiture is the appropriate remedy, considering Google’s dominant position in both the buy-side and sell-side of the online ad market. The commission highlighted that Google not only provides digital tools for online ads but also serves as an intermediary between advertisers and publishers through its ad exchange, AdX, ad server, DoubleClick, and ad-buying tools, Google Ads and DV 360.
According to the European Commission’s statement, it preliminarily finds that Google abused its dominant positions since 2014 by favoring AdX in ad purchases via DoubleClick, Google Ads, and DV 360. This alleged conduct may have been intentional to provide AdX with a competitive advantage, sidelining rival ad exchanges and allowing Google to charge higher fees in its adtech supply chain.
The commission’s preliminary finding aligns closely with an anti-trust lawsuit filed against Google by the US government in January. Further developments will be awaited as Google responds to the accusations and the European Commission progresses towards a definitive conclusion in this case.
