Competition commission alleges company prioritizes its services, harming competitors.
In a move to address big tech monopolies, the EU directs Google to divest a segment of its advertising business, as the competition regulator intensifies enforcement. The commission accuses Google of favoring its own online display advertising technology, causing harm to competing providers, advertisers, and online publishers.
Hence, the regulator firmly believed that the sole resolution for its competition concerns would be the compulsory divestment of certain Google services.
Following a two-year examination of the company’s ad-tech operations, the regulatory body determined that Google had exploited its online advertising monopoly. It favored its own ad exchange, AdX, in auctions conducted by its ad server, DFP, and manipulated bidding processes on such exchanges through its ad-buying tools, known as Google Ads and DV360.
In anticipation of the decision, Margrethe Vestager, the competition commissioner, highlighted the intricacy of the inquiry. She informed reporters about the intricate nature of the highly dynamic and technical market under investigation, making the identification of such behaviors a formidable task.
Vestager further stated, “Whenever a particular practice was identified, Google would promptly adjust its behavior to increase the difficulty of detection, while pursuing the same objectives and yielding the same outcomes.”
Dan Taylor, Google’s Vice President of Global Ads, offered a response to the decision, stating, “Our advertising technology tools play a crucial role in supporting the financial sustainability of websites and apps, while enabling businesses of all sizes to effectively reach new customers. Google remains dedicated to generating value for our publisher and advertiser partners within this highly competitive industry. The commission’s investigation focuses on a specific aspect of our advertising business and is not a new development. We disagree with the EC’s perspective and will provide a suitable response.”
In an accompanying statement, Vestager expressed, “Google’s presence spans across various levels of the ad tech supply chain. Our initial concern revolves around the potential utilization of Google’s market position to prioritize its own intermediary services.”
As per insider intelligence, Google holds a significant 28% stake in global ad revenue, solidifying its position as the leading digital advertising platform. Advertising constitutes nearly 80% of the company’s total revenue, derived from various properties such as YouTube, Google Maps, AdSense, and AdMob.
Reuters reports that Google had made efforts to reach a settlement in the case almost two years ago. However, regulators became increasingly dissatisfied with the sluggish progress and the lack of significant concessions.
