Google faces EU break-up order over anti-competitive adtech practices

By Foo Yun Chee

BRUSSELS (Reuters) -Alphabet’s Google (NASDAQ:) was charged by EU antitrust regulators with anti-competitive practices in its digital advertising business on Wednesday, which it may now have to sell part of to address their concerns.

The stakes are higher for Google in this latest clash with regulators as it concerns the company’s biggest money maker, with the adtech business accounting for 79% of total revenue last year.

Its 2022 advertising revenue, including from search services, Gmail, Google Play, Google Maps, YouTube adverts, Google Ad Manager, AdMob and AdSense, amounted to $224.5 billion.

The European Commission set out its charges in a statement of objections, two years after opening an investigation.

EU antitrust chief Margrethe Vestager said Google may have to sell part of its adtech business because a behavioural remedy is unlikely to be effective at stopping the anti-competitive practices.

“Of course I know this is a strong statement but it is a reflection of the nature of the markets, how they function and also why a behavioural commitment seemed to be out of the question,” she told a news conference.

She said the EU had closely cooperated with competition authorities in the United States and the UK.

The Commission said it took issue with Google favouring its own online display advertising technology services to the detriment of competing providers of advertising technology services, advertisers and online publishers.

It said Google has abused its dominance since 2014 by favouring its own ad exchange AdX in the ad selection auction by its dominant publisher ad server DFP, and also by favouring AdX in the way its ad buying tools Google Ads and DV360 place bids on ad exchanges.

Google is the world’s dominant digital advertising platform with a 28% market share of global ad revenue, according to research firm Insider Intelligence.

Google had sought to settle the case three months after the investigation was opened but regulators grew frustrated with the slow pace and the lack of substantial concessions, a person familiar with the matter told Reuters previously.