New Delhi (India), 15th June 2023: Google may have to sell a portion of its profitable adtech business to address anti-competitive concerns, EU regulators said on Wednesday, threatening the corporation with its toughest regulatory penalty to far.
The European Commission laid out its claims against Google in a statement of objections two years after initiating an inquiry into practises such as favouring its own advertising services, which may result in a punishment of up to 10% of Google’s annual global turnover.
The stakes are higher for Google in its new battle with authorities since it involves the company’s greatest revenue generator, with advertising accounting for 79% of total revenue last year.
Its advertising income in 2022, comprising search services, Gmail, Google Play, Google Maps, YouTube advertisements, Google Ad Manager, AdMob, and AdSense, was $224.5 billion.
Google will have several months to react to the charge. It can also request a confidential hearing before top Commission antitrust authorities and their national counterparts before the EU issues a decision, which might take a year or more. The company may also settle by providing greater remedies than previously proposed.
According to EU antitrust chief Margrethe Vestager, Google may have to sell a portion of its adtech business because a behavioural remedy is unlikely to curb the anticompetitive practises.
She told, “For instance, Google could divest its sell-side tools, DFP and AdX. By doing so, we would put an end to the conflicts of interest.”
She added, “Of course I know this is a strong statement but it is a reflection of the nature of the markets, how they function and also why a behavioural commitment seemed to be out of the question.”
Vestager stated that investigations into Google’s implementation of a privacy sandbox set of tools to restrict third-party cookies on its Chrome browser, as well as its decision to stop making the advertising identification visible to third parties on Android smartphones, would continue.
She stated that the EU had worked closely with competition authorities in the United States and the United Kingdom.
The accusation was welcomed by the European Publishers Council, who lodged a complaint with the Commission last year.
According to the Commission, Google favours its own online display advertising technology services over other advertising technology providers, advertisers, and online publishers.
It claimed that Google had abused its power since 2014 by favouring its own ad exchange AdX in the ad selection auction conducted by its dominant publisher ad server DFP, as well as by favouring AdX in how its ad buying tools Google Ads and DV360 place bids on ad exchanges.
According to research firm Insider Intelligence, Google is the world’s biggest digital advertising platform, accounting for 28% of worldwide ad revenue.
Google attempted to resolve the issue three months after the probe was launched, but regulators became irritated with the slow pace and lack of significant concessions.
