Antitrust Alert: EU Commission Challenges Google's Practices in Online Advertising Technology

The European Commission has issued a Statement of Objections to Google, outlining its preliminary findings that the tech giant violated EU antitrust laws by distorting competition in the advertising technology (adtech) sector. The Commission alleges that Google’s practices have unfairly advantaged its own services, harming competitors, publishers, and advertisers.

The Core Issue

Google operates at multiple levels of the adtech supply chain, including:

1. Ad Buying Tools: Google Ads and DV360.

2. Publisher Ad Server: DoubleClick for Publishers (DFP).

3. Ad Exchange: AdX.

The Commission’s preliminary findings indicate that Google:

• Favoured its Ad Exchange (AdX): Google allegedly provided AdX with advance information on competitor bids during ad selection auctions via DFP, giving it an unfair advantage.

• Limited Competition: Google Ads and DV360 reportedly directed bids primarily to AdX, reducing competition with other ad exchanges.

Potential Impacts of Google's Conduct

• Reinforced Google’s dominance in the adtech market.

• Marginalized competing ad exchanges.

• Enabled Google to charge higher fees, increasing costs for advertisers and reducing publishers’ revenues.

If confirmed, these practices would violate Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits abuse of a dominant market position.

Proposed Remedies

The Commission has suggested that behavioural remedies (e.g., commitments to change practices) may not be sufficient due to Google's inherent conflict of interest as a dominant player across multiple levels of the adtech ecosystem. Instead, the Commission is considering structural remedies, such as the mandatory divestment of certain services, to address competition concerns effectively.

Background and Process

• The investigation was formally launched in June 2021.

• A Statement of Objections is a preliminary step in antitrust investigations, allowing the company to review the evidence, submit written responses, and request an oral hearing.

• If the Commission confirms the violations, it may impose fines of up to 10% of Google's annual global revenue and require structural or behavioural remedies.

Key Quote

Margrethe Vestager, Executive Vice-President for Competition Policy:"Google is present at almost all levels of the adtech supply chain. Our preliminary concern is that Google may have used its market position to favour its own services, harming competitors, publishers, and increasing advertisers’ costs. If confirmed, Google’s practices would be illegal under our competition rules."

Next Steps

Google now has the opportunity to defend itself against these allegations. The investigation remains ongoing, and the timeline for resolution depends on various factors, including the complexity of the case and Google’s cooperation.

For further updates, visit the European Commission’s Competition website or refer to case number AT.40670.