Google faces EU antitrust investigation over its advertising business

The official examination, which follows an initial probe that started in 2019, will analyze whether Google (GOOGL) is misshaping competitors by limiting access to user information for marketing functions, while booking such information for its own usage, the European Commission stated on Tuesday.

“Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary. So Google is present at almost all levels of the supply chain for online display advertising,” EU chief antitrust main Margrethe Vestager stated in a declaration.

“We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.”

A Google representative stated that the business would engage constructively with the European Commission “to answer their questions and demonstrate the benefits of our products to European businesses and consumers.”

Google is currently dealing with a number of antitrust cases in the United States, consisting of one brought by the federal government, which implicates the business of running an unlawful monopoly in the markets for online search and search marketing.

The business produces about 80% of its income from marketing. In the 3 months ended March 31, Google’s profits in Europe, Middle East and Africa amounted to $17 billion, making it the 2nd essential area to the business after the Americas.

Overall screen marketing costs in the European Union deserved about €20 billion ($24 billion) in 2019. It’s a service controlled by Google and Facebook (FB), which is currently being examined by EU regulators over claims that its usage of information offers it an unjust benefit.

France’s competitors authority fined Google €220 million ($270 million) previously this month “for abusing its dominant position” in the market for online marketing to the hinderance of competing platforms and publishers.

The authority implicated Google of offering “preferential treatment” to Google Advertisement Supervisor, its advertisement management platform for big publishers. It did this by preferring its own online advertisement market, AdX, where publishers offer area to marketers in genuine time, according to the guard dog.

Altering its company

As part of the arrangement with French authorities, Google devoted to making it much easier for publishers in France to utilize its information and utilize its tools with other advertisement innovations. “We will be testing and developing these changes over the coming months before rolling them out more broadly, including some globally,” the business stated in a declaration on June 7.

Google supplies a number of advertisement tech services that intermediate in between marketers and publishers in order to show advertisements on sites or mobile apps. The EU examination will concentrate on a variety of locations of issue, consisting of the commitment to utilize its services to buy or serve advertisements on Google or YouTube.

“A level playing field is of the essence for everyone in the supply chain,” stated Vestager.

“Fair competition is important — both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers, to generate revenues and funding for content. We will also be looking at Google’s policies on user tracking to make sure they are in line with fair competition,” she included.

According to Google, competitors in online marketing has actually made advertisements more inexpensive, minimized advertisement tech charges and developed more alternatives for publishers and marketers. The business likewise states that publishers keep about 70% of the income when utilizing its items, which the most significant marketers utilize 4 or more platforms to purchase advertisements.

— Rob North, Eoin McSweeney and Hanna Ziady added to this post.

Jobber Wiki author Frank Long contributed to this report.