The European Commission has sent a formal statement of objections to Google, signaling that it may be preparing to break up the tech giant’s adtech business. The move comes after two years of investigation into various aspects of Google’s adtech business, including its dominance in both the buy and sell sides of the market.
Background on the Investigation
In 2021, the EU opened an investigation into Google’s adtech business, focusing on several key areas:
- Obligations imposed by Google to use certain ad services when purchasing display ads on YouTube
- Potential favoritism shown by Google’s ad exchange (AdX) towards its own advertising intermediation services
- Restrictions placed on customers’ ability to access data about user identity or behavior
The investigation has since sharpened into a hard suspicion that Google has abused its dominant positions in the adtech stack by unfairly favoring its own ad tools over rivals.
Commission’s Concerns and Findings
According to EU EVP Margrethe Vestager, the Commission has found evidence of "many different forms" of self-preferencing conduct by Google. These include:
- Favoritism towards Google’s own ads in matching auctions
- Enabling Google to maintain a high fee on its ad exchange
Vestager also highlighted concerns about Google’s dominance in both the buy and sell sides of the market, stating that this gives the company an "unfair advantage" over competitors.
Google’s Response
In response to the Commission’s statement of objections, Google stated: "We disagree with the EC’s view and we will respond accordingly." The company has previously denied any wrongdoing and maintained that its adtech business operates in a competitive market.
Broader Implications and Context
This development is part of a broader trend of increased scrutiny of tech giants’ business practices by regulatory authorities around the world. In January, US authorities sued Google over similar antitrust allegations, accusing the company of achieving monopoly control of the digital ad market through "anticompetitive, exclusionary, and unlawful means".
Conclusion
The European Commission’s statement of objections to Google marks a significant escalation in the investigation into the tech giant’s adtech business. The potential break-up of Google’s adtech business would have far-reaching implications for the industry as a whole, and could set a precedent for similar regulatory action against other tech giants.
Related Developments
- US authorities sued Google over antitrust allegations in January
- Competition authorities in the UK began investigating Google’s positions in the adtech tech stack in May last year
- Google’s plan to deprecate support for third-party tracking cookies in its Chrome browser and migrate to an alternative form of ad targeting (its Privacy Sandbox proposal) was announced as part of the Commission’s adtech probe in June 2021.
