In an unprecedented move, the European Union’s antitrust authorities declared on Wednesday that Google must sell off a portion of its lucrative digital advertising business to address competition issues.
The chief antitrust enforcer in the EU, the European Commission, said its initial conclusion following an investigation: “Only the mandatory divestment by Google of part of its services” would ease the worries.
The 27-nation EU has been at the forefront of the worldwide drive to regulate Big Tech firms, including ground-breaking laws on AI.
Still, it has historically depended on imposing astronomical fines, such as three antitrust penalties for Google totaling billions of euros (dollars).
It is the first time the EU has instructed a major giant to divide up significant portions of its operations due to violations of the EU’s burdensome antitrust regulations. However, specifics on how that would happen have not been made public.
Before the panel judges, Google can now argue its defense case.
The corporation disagreed with the conclusion and “will respond accordingly,” pointing out that the EU’s probe only covered a small portion of its advertising business.
According to Dan Taylor, vice president of worldwide advertisements at Google, “Our advertising technology tools help websites and apps fund their content and enable businesses of all sizes to reach new customers effectively.”
Google is still dedicated to bringing value to its publisher and advertisement partners.
The commission’s decision results from a formal inquiry launched in June 2021 to determine whether Google had broken the bloc’s competition laws by favoring its online display advertising technology services at the expense of competing publishers, advertisers, and advertising technology services.
Google is dominant on both sides of the ad-selling business, according to Vice President of the European Commission Margrethe Vestager.
According to the commission, Google exploited its position by preferring its ad exchange, strengthening its capacity to demand a high service price.
“Google is advocating for both buyers’ and sellers’ interests. She stated at a news conference that this creates inherent and widespread tensions since Google simultaneously dictates how demand and supply should interact.
The commission examined whether Google was leveraging YouTube’s dominant position to benefit its ad-buying services by restricting competitors as part of its inquiry into the matter.
The British antitrust police are also looking into Google’s ad tech division, and legal action is pending in the US.
In three separate antitrust lawsuits affecting Google’s Android mobile operating system and its retail and search advertising services, Brussels has smacked the company with fines totaling more than 8 billion euros (now $8.6 billion).
The corporation is appealing all three sanctions. The EU court cut the Android fine to 4.125 million euros last year.
The maximum fine EU regulators can levy against an organization is 10% of its yearly sales.