Google’s adtech business to face EU investigation by year-end; Sources

By Amirtha P S, Desk Reporter
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The American multinational conglomerate Alphabet’s unit Google could face its biggest regulatory threat, as the EU antitrust regulators are planning to open a formal investigation into the company’s profit-making digital advertising business before the end of 2021, as per people familiar with the matter.

The probe would mark a new front by the EU competition enforcer against Google. In the last decade, it had fined the company more than $9.8 billion for blocking rivals in online shopping, android smartphones and online advertising.

The EU probe would target the American technology giant’s position with regards to advertisers, publishers, intermediaries, and rivals, indicating deeper scrutiny than the French antitrust agency’s case concluded last week.

Last year, Google made $147 billion in revenue from online ads which is more than any other company in the world. Ads on its properties, including search, YouTube and Gmail accounted for the bulk of sales and profits. Nearly 6 percent of revenue came from its display or network business, in which other media companies use Google technology to sell ads on their website and apps.

The US Justice Department, joined by some states, sued Google last year for abusing its dominance in search ads. A group of states led by Texas in a later lawsuit focussed on anti-competitive behavior on the network side of the house.

Last week, France settled with Google for $268 million and various commitments over similar allegations related to the network business, and the unit also must work closely with Britain’s competition regulator on upcoming software changes as part of a settlement reached days later.

The new EU inquiry could end up aiming at all of Google’s ad empire. Market researcher eMarketer expects Google to control 27 percent of global online ad spending this year, including 57 percent for search ads and 10 percent for display.

The Commission should conclude ongoing cases before starting new ones, said Thomas Hoppner, a partner at law firm Hausfeld, and who advises several complainants against Google.

“From the practitioner’s point of view and from the industry’s point of view, it appears equally important to bring investigations into local search and Google’s job search to an end when other authorities have opened investigations into Google’s adtech,” Mr. Hoppner said.

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