European Commission Opens Google Advertising Probe

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Official antitrust investigation opened into alleged anticompetitive conduct by Google in the online advertising tech sector

The European Commission continues to maintain the pressure on Google with the confirmation on Tuesday of the opening of a formal antitrust investigation.

According to the EC announcement, “this probe will assess whether Google has violated EU competition rules by favouring its own online display advertising technology services in the so called ‘ad tech’ supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers.”

The Commission added that “the formal investigation will notably examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use.”

EC investigation

The official investigation should come as no surprise to Google.

In January it was revealed that European Commission was seeking information from advertisers regarding Google’s advertising technology practices.

But now it has confirmed the opening of an official investigation.

“Online advertising services are at the heart of how Google and publishers monetise their online services,” said executive VP Margrethe Vestager. “Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary.”

“So Google is present at almost all levels of the supply chain for online display advertising,” Vestager added. “We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.”

“A level playing field is of the essence for everyone in the supply chain,” Vestager said. “Fair competition is important – both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers, to generate revenues and funding for content. We will also be looking at Google’s policies on user tracking to make sure they are in line with fair competition.”

Anti-competitive behaviour?

The EC pointed out that many publishers rely on online display advertising to fund free online content for consumers. It said that in 2019, display advertising spending in the EU was estimated to be approximately 20 billion euros.

It also noted that Google provides several advertising technology services that intermediate between advertisers and publishers in order to display ads on web sites or mobile apps.

Therefore, the focus of the EC investigation will be on display advertising where Google offers a number of services both to advertisers and publishers.

And if proven, the EC warned the practices under investigation may breach EU competition rules on anti-competitive agreements.

Previous fines

Google has reason to be concerned, as it has already been sanctioned by the EU in recent years to the tune of $9.7 billion in total, for abusing its market power to favour its shopping comparison service, its Android mobile operating system, and its advertising business.

In 2017 the European Commission had fined Google 2.4bn euros (£2.01bn) after the Commission ruled that Google had thwarted rivals of shopping comparison websites.

Then in July 2018 the European Commission had fined Google the record 4.3 billion euros (£3.83bn) for commercial practices related to its Android mobile operating system.

And then in March 2019 European antitrust regulators once again fined Google 1.49bn euros (£1.3bn) concerning the firm’s AdSense advertising service.

And that does not include a number of antitrust probes Google is facing in the United States.

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Author: Tom Jowitt
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