EU opens new competition investigation into Google’s online advertising

The EU has opened a new large-scale antitrust investigation into Google, investigating whether the tech giant has unfairly stifled competition in online advertising.

Margrethe Vestager, the European digital competition authority, announced the investigation today – saying Google may have unfairly handicapped those who buy ad space, tech companies selling ad space and sites that depend on revenue advertising to work.

Among the themes of the survey will be Google’s decision to force everyone who buys ad space on YouTube to use its services and to restrict the amount of user data that rival ad sales companies can access, she said.

If found guilty, Google could be fined up to $ 18 billion – 10% of its annual revenue, which was $ 180 billion last year – and forced to change behavior.

Ms Vestager has already conducted three EU antitrust investigations into Google, which resulted in a total fine of $ 9 billion.

The new investigation also comes amid investigations by Google in various countries into its advertising activity – including a case in France earlier this month that saw the tech company fined $ 260 million for a “extremely serious” violation of competition rules.

Margrethe Vestager, the EU’s digital competition authority, announced a radical new investigation into Google’s online advertising business

A similar case is also pending in the United States after states led by Texas filed a class action lawsuit alleging that Google conspired with Facebook to establish what amounted to a monopoly on online advertising.

And UK regulators are examining Google’s plans to change the way it collects information about users’ browsing habits in ways that harm competitors who rely on that information – an area the EU has said. she would also examine.

Speaking today, Ms Vestager said: Online advertising services are at the heart of how Google and publishers monetize their online services.

“Google collects data to be used for targeted advertising purposes, sells advertising space and also acts as an online advertising intermediary. Thus, Google is present at almost every level of the supply chain for online display advertising.

“We are concerned that Google has made it more difficult for competing online advertising services to compete in the so-called ad technology stack.

“A level playing field is essential for everyone in the supply chain. Fair competition is important – both for advertisers to reach consumers on publisher sites and for publishers to sell their space to advertisers, in order to generate revenue and funding for the content.

“We will also be reviewing Google’s policies on user tracking to ensure they are in line with fair competition.”

Google has a range of technologies that it uses to monetize online advertising.

They include tools for sites that host advertisements in exchange for a share of the revenue generated, companies that want to buy space to host their ads, and companies that sell advertising space online.

EU to investigate Google's decision to force businesses that buy YouTube ads to use its ad-selling software, among other practices (file image)

EU to investigate Google’s decision to force businesses that buy YouTube ads to use its ad-selling software, among other practices (file image)

Among the tools investigated by the EU are Display & Video 360, Google Ads and Google Ad Manager – services owned by Google that are used to display advertisements on YouTube, among other platforms.

EU says it’s investigating 2016 Google decision to force all businesses that buy ad space on YouTube to use its services – a move that rival ad sales companies say has crippled them.

AdX, Google’s online auction house where it sells advertising space, is also under investigation, amid allegations it unfairly favors users of services such as Display & Video 360 and Google Ads.

Finally, the EU will also be looking at software called Doubleclick – which is used by publishers such as news sites to sell ad space – as Google has limited its ability to see user data it had access to. .

Several of these same services – such as Doubleclick and AdX – have also been the subject of an investigation by French regulators, who discovered that their mode of operation violated the rules of fair competition.

As part of the case, Google has been accused of taking data from DoubleClick and using it to optimize sales on AdX without giving its competitors access to the same data.

Regulators also found that Doubleclick varied the commission it took on a sale based on the prices offered by its competitors.

At the same time, Google arranged for AdX to give preferential treatment to offers emanating from Doubleclick, effectively eliminating the competition.

Google did not dispute the findings and the regulator said the company is committed to making operational changes, including better interoperability with third-party ad placement providers.

The EU will also investigate Google's online advertising auction house, AdX, over allegations that it unfairly promoted offers from customers using the company's other software.

The EU will also investigate Google’s online advertising auction house, AdX, over allegations that it unfairly promoted offers from customers using the company’s other software.

But the changes demanded by French regulators could pave the way for the EU to impose similar reforms, provided its investigation also reveals that Google broke the rules.

In a statement reacting to the latest EU survey, Google said: “Thousands of European businesses use our advertising products to reach new customers and fund their websites every day.

“They choose them because they are competitive and efficient. We will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers. ‘

Digital advertising accounts for the bulk of Google’s revenue, which stood at $ 55.3 billion in the first quarter of this year.

This has sparked interest from regulators who, until recent years, had largely turned a blind eye to how the tech giant made its money.

The EU and Ms Vestager led the response, but their actions are now being emulated around the world and applied to other companies.

For example, the German competition regulator recently said it was expanding an antitrust investigation of Google and its parent company Alphabet to include Google News Showcase, a service aimed at increasing revenues for media publishers.

Facebook also found itself targeted last week by parallel competition investigations from the European Union and Britain over whether the social media giant is using advertiser data to unfairly dominate the classifieds market by line.

Google had already been fined 150 million euros by the French regulator in December 2019 for “opaque” operating rules for its advertising platform, which were deemed to be applied in an “unfair and random manner”.

And in December of last year, Google as well as Amazon were fined a total of 135 million euros by the French privacy watchdog for placing advertising cookies on users’ computers without their consent.

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