Breakup of Google Ad-Tech Business Now on Table in Europe, Too
Summary
- Expected EU antitrust case would add to U.S. Justice Department’s lawsuit
European Union antitrust regulators are considering pursuing a breakup of Google’s advertising-technology business as part of a new antitrust complaint, according to people familiar with the matter, escalating a trans-Atlantic push to loosen the search giant’s hold on digital ads.
The European Commission, the EU’s top antitrust regulator, is expected as soon as Wednesday to file a formal antitrust complaint against Google alleging that the company abuses its role as one of the largest brokers, suppliers and online auctioneers of digital ads on third-party websites and apps, the people said.
Bloomberg earlier reported that the commission is expected to announce a formal antitrust complaint against Google’s ad-tech business as soon as Wednesday.
As part of that case, EU officials are considering ordering Google to sell off some parts of its ad-tech business, the people said. Those deliberations haven’t been previously reported.
While the commission could, if it upholds the charges in its complaint, order remedies short of asset sales, regulators currently believe there are no obvious behavioral changes that Google could make to address their concerns, the people said. It is unusual for the commission to order significant divestitures in antitrust cases, which are often resolved with fines and orders to change behavior.
Google declined to comment.
Large antitrust investigations can often take a year or more to complete after a formal complaint is issued, and can end without a finding of wrongdoing. The commission wouldn’t make a decision on whether to pursue a breakup of the ad-tech business or other remedies until the investigation is finished, the people said.
The EU case, detailed in a document known as a statement of objections, is expected to cover somewhat similar ground to a January lawsuit from the U.S. Justice Department, which accused Google of abusing monopoly power in the ad-tech industry, hurting web publishers and advertisers that try to use competing products. That lawsuit asks a U.S. federal court to unwind Google ad-tech acquisitions.
The EU and U.S. cases presage protracted antitrust battles playing out on both sides of the Atlantic with seismic implications for the digital-ad industry. The U.K.’s Competition and Markets Authority is also investigating Google’s ad-tech business. Google’s ad-tech business represented nearly 14% of the company’s $54.5 billion in advertising revenue in the first quarter.
Though largely invisible to internet users, Google’s ad-tech tools underpin much of the buying and selling of digital ads that help fund online publishers. Google’s ad-tech business includes a tool publishers can use to offer ad space, a product for advertisers to buy those slots and an exchange that automatically links bidders with webpages as they are being loaded for individual users.
Google has long faced allegations—from media executives, lawmakers and regulators—that its presence at several points of the online ad-buying process gives it an unfair advantage over ad-tech rivals and siphons away revenue from online publishers.
Google has contested those claims and argued that publishers and advertisers use its tools because they are competitive and effective. The company has also said it has no plans to sell or exit the ad-tech business, in part because it wants to support the business model for websites so that its core search-engine business has more sites to find.
The complaint the EU is close to filing stems from an investigation EU regulators formally opened into Google’s ad-tech business in 2021. As part of the probe, the EU has also looked at related issues, such as whether Google excluded competitors from brokering ad-buys on its video site YouTube.
Google has previously attempted to settle claims against its ad-tech business. Last year, the company tried to fend off the U.S. lawsuit by proposing splitting parts of its ad-tech business into a separate unit under the Alphabet umbrella, short of the full divestitures U.S. officials were seeking, The Wall Street Journal reported.
In 2021, Google settled another competition case related to its ad-tech business in France by agreeing to improve data access to competing ad-tech companies and not to use its data to sell ads in ways rivals couldn’t reproduce. The company also agreed to pay a fine of 220 million euros, or about $237 million.
