Google may need to sell some of its advertising business to prevent it from abusing its market dominance and foreclosing competitors, the European Commission said Wednesday as it filed antitrust charges against the search giant.
Google « may have abused its dominant position by favoring its own ad tech business, » antitrust commissioner Margrethe Vestager said at a news conference Wednesday.
The ad technology industry is « highly dynamic, » Vestager said, and « has changed a lot in the last 15 years. » She said that Google was « pervasive » along the ad technology value chain and that offloading some of its business might be « the only way to solve this problem. »
« So far we see no alternative at this stage of the investigation, » he added.
« If the Commission concludes that Google has acted illegally, » Vestager said, it could order the company to « divest part of [its] services », such as its DoubleClick For Publishers or AdX services, and « by doing so, we will end the conflict of interest ».
The Commission said in a Statement of Objections that Google is dominant in both serving and buying ads and may have abused its position since 2014, favoring its own online display advertising technology services over competitors.
The antitrust authority said it was « concerned » that favoring its own ad exchange service and avoiding others gave Google a « competitive advantage and may have foreclosed » rivals, allowing it to charge higher prices for its services.
The fact that Google is active on both sides of the digital advertising market creates « inherent conflicts of interest, » the Commission said, adding that « only Google’s compulsory divestment of part of its services will solve its competition problems « .
The competition watchdog of the European Union has been probe Google’s online display advertising business since 2021. It had previously probed the company’s shopping search service, its mobile phone software and advertising contracts, imposing fines of more than 8 billion euros.
Google’s advertising business is central to how it generates huge revenue: The company sells advertising space on websites, which funnels funding to website publishers, and also receives ads from advertisers.
When Google was fined by the French competition authority in 2021, it agreed to limit the data shared between the two sides of that business. The US Department of Justice earlier this year sued Google for monopolizing the « advertising technology stack » that serves both publishers and advertisers.
“Our ad 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 industry, » said Dan Taylor, vice president of global ads at Google, in response to the commission’s decision. « The commission’s investigation focuses on one aspect part of our advertising business and is not new. We do not agree with the point of view of the European Commission and will respond accordingly”.
This article has been updated.
