Brussels hits Google with fresh charges over ad technology

Brussels has hit Google with charges over the tech giant’s alleged distortion of competition in the advertising technology sector and may force it to sell part of its online advertising business. 

The European Commission said Google unfairly takes advantage of its dominant position in online advertisement markets — such as tools that place banner ads on newspaper sites — hitting the businesses of both advertisers and the websites and apps on which ads appear.

“Only the mandatory divestment by Google of part of its services would address” the competition concerns, the commission said in formal but preliminary findings on Wednesday.

Such a move would be the first time the commission has ordered a tech giant to break up part of its business after years of antitrust enforcement in which Google has been fined billions of euros.

Google said it disagreed with the commission’s view and would “respond accordingly”. 

“It is quite rare that we ask for a divestiture and we may do so if we find that Google has abused its dominant position,” said Margrethe Vestager, the EU’s executive vice-president in charge of competition policy.

“Google is active on both sides of the market with its publisher ad server and with its ad buying tools,” the commission said, adding that it “holds a dominant position on both ends”.

Ad servers are used to help publishers such as websites and apps manage automated advertising, while ad buying tools help marketers target consumers.

Google plays a major role at every stage of the process for buying and selling advertising on the open internet, giving it unparalleled advantages over pricing for services determined in ad exchanges that match publishers and advertisers.

In particular, the commission said that, since at least 2014, Google had favoured placing bids with its own ad exchange, AdX.

Vestager said in some instances AdX had the right to bid after all other bidders had placed their bids, while in others, AdX was informed in advance of the value of the best bid from competitors.

The commission added that Google’s conduct “may have foreclosed rival ad exchanges” and allowed it to charge higher prices.

The probe dates back to June 2021 when the commission said it had concerns that Google was making it harder for rivals to compete in the online advertising market. 

The preliminary conclusions come as Google faces growing scrutiny of its approach to the fast-growing “ad tech” space.

In January, the US justice department announced that it was suing Google over similar allegations that it had embarked on a “systematic campaign” to gain monopolistic control of the digital ad tech market by attempting to seize control of high-tech tools, despite “pervasive conflicts of interest”. 

Dan Taylor, vice-president of Global Ads at Google, said: “Our advertising 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 sector. The Commission’s investigation focuses on a narrow aspect of our advertising business and is not new.”