Google Ordered To Break Its Ad-Tech Business: EU Probe Observes Monopolistic Hold Over Online Advertising

Google may soon have to break apart its behemoth advertising business, at least in the European Union (EU). A two-year investigation has concluded that the search giant has a monopolistic hold over the online advertising business in the EU.

The EU has effectively ordered Google to divest parts of its advertising business. The ruling is based on the competition commission’s accusations of Google monopolizing its ad-tech business. Let’s look at the latest developments which might have a significant impact on Google.

EU Competition Commission Concludes Google Abused Its Dominant Position

The EU competition commission stated the issue lies “with Google favoring its own online display advertising technology services to the detriment of competing providers of advertising technology services, advertisers and online publishers.”

The commission essentially concluded Google abused its dominant position by effectively carving a monopoly in the advertising business. The commission opinioned Google unlawfully favored its ad exchange in ad auctions.

Further, the commission believes the only solution to address competition is to force Google to divest parts of its ad business. As part of the ruling, European Commissioner for Competition, Margrethe Vestager, said:

“Google is present at almost all levels of the so-called ad tech supply chain. Our preliminary concern is that Google may have used its market position to favor its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs.”

Google To Divest Its Ad-Tech Business In The EU?

As expected, Google can and will fight this ruling. The search giant can respond to the EU’s allegations and would soon begin, what could be an extensively long-drawn legal battle to protect its ad-tech business in the EU. Vice President of Google Ads, Dan Taylor, publicly responded to the ruling:

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. We disagree with the EC’s view and we will respond accordingly.”

Simply put, Google will use all legal options and ways to try and prove that its ad-tech business maintains healthy competition. One thing is amply clear Google isn’t rushing to look for a divestment partner.

Incidentally, even the AMERICA Act bill that was recently proposed in the United States has a similar approach and attitude toward big tech giants. Hence, other large ad tech platforms too would be closely watching this drama unfold.

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