Google’s Adtech Business Under EU Antitrust Scrutiny
EU antitrust officials are considering ordering Alphabet’s Google to end anti-competitive practices in its adtech business, but a breakup of the company is unlikely, according to people with direct knowledge of the matter. The European Union regulators are set to issue a decision with a hefty fine in the coming months, following a threat from antitrust chief Margrethe Vestager to break up Google’s lucrative adtech business last year.
If the threat had been carried out, it would have been the harshest regulatory penalty to date against Google, which has been charged with favoring its own advertising services. However, competition officials will likely not issue a breakup order due to the complexity involved, the people said. A break-up order could come at a later stage if Google continues its anti-competitive practices, they added, pointing to a precedent-setting case involving Microsoft two decades ago.
The European Commission’s decision could evolve, and an EU decision is unlikely to come before Vestager leaves office in November, they said, but is still theoretically possible. The Commission and Google, which has racked up 8.25 billion euros ($9.14 billion) in EU antitrust fines in the last decade, declined to comment.
Google’s 2023 advertising revenue, including from search services, Gmail, Google Play, Google Maps, YouTube, Google Ad Manager, AdMob, and AdSense, amounted to $237.85 billion or 77% of total revenues, making it the world’s dominant digital advertising platform. Vestager had suggested that Google could sell its sell-side tools DFP and its own ad exchange AdX due to conflicts of interest, as it also owns ad buying tools Google Ads and DV360, which places bids on ad exchanges.
Vestager claimed that the company had allegedly illegally favored its own ad exchange AdX in matching auctions, abusing its dominance since 2014. Google is currently the target of an antitrust trial brought by the U.S. Department of Justice, which claims that it sought to monopolize markets for publisher ad servers and advertiser ad networks, and tried to dominate the market for ad exchanges which sit in the middle.
The development comes as the tech giant faces increasing scrutiny over its business practices, with the EU and other regulators around the world investigating its dominance in various markets.
