The European Commission has hit Alphabets Google with antitrust charges over its behavior in the advertising technology business, which is the companys biggest earner.
The Commission, which has been probing the matter for the last two years, will now launch a formal antitrust investigation. If that confirms its suspicions, it said it may order Google to break up its adtech business.
Google has a major presence in every major part of the adtech value chainits ad-buying tools and publisher ad server (used to manage advertising space on sites and in apps) are dominant in their fields, and Googles AdX is the biggest ad exchange out there.
The Commission said the U.S. giant has for nearly a decade been using its DoubleClick For Publishers (DFP) ad server and its Google Ads and DV 360 ad-buying tools to unlawfully favor AdX.
Not only did this possibly harm Googles competitors [in the ad-exchange space] but also publishers interests, while also increasing advertisers costs. If confirmed, Googles practices would be illegal under our competition rules, said EU antitrust commissioner Margrethe Vestager.
Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector, said Googles vice-president for global ads, Dan Taylor, in a statement. The Commissions investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the ECs view and we will respond accordingly.
According to one practice highlighted by the Commission, Googles DFP ad server organized sealed-bid auctions for ads, but gave Googles AdX a heads-up about rival exchanges bids before AdX placed its own bid.
The second example is about a practice by Google Ads, Googles buy-side tool for advertisers, said Vestager. Google Ads places bids on behalf of advertisers so that their ads could be placed on the internet and get good visibility. One would expect Google Ads to place bids on as many ad exchanges as possible, because this would maximize the probability that the ad will be widely displayed.
Our investigation showed that Google decided to place Google Ads bids only, or almost only, on Googles AdX. By doing so, Google managed to make AdX the most attractive marketplace. This gave it a significant competitive advantage over rival ad exchanges.
Google has received three major antitrust fines from the Commission in recent years: a 1.5 billion fine in 2019 for abusing its search monopoly in AdSense for Search boxes on websites; a 5 billion fine in 2018 for various Android-related abuses; and a 2.7 billion fine in 2017 for unfairly promoting its own comparison-shopping services at the top of its search results.
Apart from paying fines in those cases, the Commission ensured that Google changed its behavior. But in this new case, Vestager is playing a different game.
The detection of these behaviors canbe very challenging, she said. We have seen this play out concretely: each time a practice was detected by the industry, Google subtly modified its behavior so as to make it more difficult to detect, but with the same objectives, with the same effects. A remedy requiring Google just to change its behavior would allow Google to continue doing what it has been doing so far, just under a different disguise.
Therefore, she said the Commission could force Google to jettison its DFP and AdX sell-side tools, thus ending its conflicts of interest.
Vestager added that she had been coordinating with the U.S. Department of Justice on this case, as well as the U.K.s Competition and Markets Authority (CMA) and other national antitrust authorities. The DoJ, along with several state attorneys general, levied similar charges against Google in January.
