Technology Brussels accuses Google of abusive practices in online advertising and slips a...

Brussels accuses Google of abusive practices in online advertising and slips a solution: to get rid of part of its business

Brussels accuses Google of abusive practices in online advertising and slips a solution: to get rid of part of its business

The European Commission has charged again this Wednesday against the technology giant Google and its online advertising services. The European regulator has dropped that the US technology company should partly sell its advertising business in Europe due to its dominant position. A position that would go against the fundamental European rules on competition.

For Brussels, Google has breached EU antitrust rules by distorting competition in the advertising sector on-line through its technological services, such as Google Ads among others, which serve as intermediaries between advertisers and publishers to display ads on websites or mobile applications.

The European organization has presented what is called a Statement of Objections, that is, a list of charges against the US company, such as its alleged monopolistic practices. Google can still appeal those accusations.

These charges represent the prelude to a possible fine in the future, which would be 10% of the company’s annual worldwide turnover. As the Commission has learned, the Silicon Valley giant will probably have to part with one of these verticals in order to continue operating in Europe, since a fine would be insufficient.

“The Commission preliminarily considers that, in this specific case, a behavior-based solution is likely to be ineffective in avoiding the risk of Google continuing these self-preferring behaviors or adopting new ones. Google operates on both sides of the market with its ad server for publishers and with its ad buying tools, and it occupies a dominant position in both (…). This gives rise to a situation of conflicts of interest, inherent to Google”, the regulator has pointed out in a statement.

“The preliminary opinion of the Commission is, therefore, that only the mandatory divestment by Google of part of its services would solve these competition problems“he finishes.

Following the investigation carried out by the Commission, which started in 2021, Brussels has concluded that Google’s publisher ad servers called “DFP”, and the programmatic ad buying tools for the web with their “Google Ads” services and “DV360”, assume a dominant position in the European market.

According to the Commission, Google would have favored its own AdX tool in the ad selection auction, informing AdX in advance of the value of the best bid from the competitors that it had to beat to win the auction.

Furthermore, according to the European regulator, the tech giant also reportedly favored its AdX ad exchange in the way that its Google Ads and DV360 ad buying tools placed bids on ad exchanges.

For example, the regulator says, Google Ads avoided competing ad exchanges and bid primarily on AdX, making it the most attractive ad exchange.

All these practices would have spread over time since 2014.

“Google has a very strong market position in the online advertising technology sector. It collects user data, sells ad space and acts as an intermediary for online advertising. Google is therefore present at almost all levels of the so-called ad-tech supply chain,” said Margrethe Vestager, Vice President of the European Commission and Commissioner for Competition.

“Our preliminary concern is that Google may have used its market position to favor its own intermediation services. This would possibly not only harm Google’s competitors, but also publisher interests, while increasing the costs of advertisers. If confirmed, Google’s practices would be illegal under our competition rules“, it is finished.

For its part, Google has not been slow to react. He has done so through Dan Taylor, global vice president of the company’s advertising division.

“Our ad technology tools help websites and apps finance 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.” , assures.

“The Commission’s investigation focuses on a limited aspect of our advertising business and is not new. We do not agree with the opinion of the European Commission and will respond accordingly“he points.

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