Global Courant
BRUSSELS — European Union regulators slammed Google with new antitrust charges on Wednesday, saying the only way to allay competition concerns over its lucrative digital advertising business is to sell off parts of the tech giant’s main moneymaker.
The unprecedented decision to push for such a break marks a significant escalation by Brussels in its crackdown on Silicon Valley’s digital giants.
The European Commission, the bloc’s executive branch and top antitrust enforcer, said after an investigation that its preliminary position is that “only Google’s mandatory divestment of some of its services” would allay concerns.
The 27-nation EU has led the global movement to crack down on Big Tech companies – including groundbreaking rules on artificial intelligence – but has previously relied on imposing blockbuster fines, including three antitrust fines for Google worth €100,000. billions of euros (dollars).
It’s the first time the bloc has told a tech giant it must break up key parts of its business over violations of the EU’s strict antitrust laws, though details of what that might look like following the preliminary finding are unclear.
Google can now defend itself by making its case before the commission makes its final decision. The company said it disagreed with the decision and “will respond accordingly”, adding that the EU investigation is targeting a small portion of its advertising business.
“Our advertising technology tools help websites and apps fund their content and enable businesses of all sizes to effectively reach new customers,” said Dan Taylor, vice president of global advertising at Google. “Google remains committed to creating value for our publishers and advertiser partners in this highly competitive industry.”
The commission’s decision stems from a formal investigation opened in June 2021 looking into whether Google violated the bloc’s competition rules by favoring its own online display advertising technology services over rival publishers, advertisers and advertising technology services.
Margrethe Vestager, Vice President of the European Commission, says Google is dominant on both sides of the advertising sales market. Google abused that position by favoring its own ad exchange, strengthening its ability to charge high fees for its services, the commission said.
“Google represents the interests of both buyers and sellers. And at the same time, Google sets the rules on how supply and demand should meet,” she said at a news conference. “This leads to inherent and pervasive conflicts of interest.”
YouTube was one of the focuses of the commission’s investigation, which examined whether Google used the video-sharing site’s dominant position to favor its own ad-buying services by imposing restrictions on rivals.
Google’s ad technology business is also under investigation by the UK’s antitrust watchdog and is being sued in the US
Brussels previously hit Google with more than €8 billion (now $8.6 billion) in fines in three separate antitrust cases involving the Android mobile operating system and shopping and search advertising services.
The company is appealing all three fines. EU regulators have the power to impose fines worth up to 10% of a company’s annual turnover.
While Google brought in $54.5 billion in ad sales in the first three months of the year and YouTube made nearly $6.7 billion in ad sales, that marked a back-to-back slump.
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Chan reported from London.
