Google’s online advertising business set to face its biggest regulatory threat in the EU by year-end

The Google Alphabet unit could face its biggest regulatory threat, as EU antitrust regulators set to open a formal investigation into its lucrative digital advertising business before the end of the year, officials said. people familiar with the matter.

This would mark a new front for the European competition authority against Google. Over the past decade, he fined the company more than 8 billion euros ($ 9.8 billion) (approximately Rs. 72,661 crore) for blocking competitors in online shopping. , Android smartphones and online advertising.

An EU investigation would focus on Google’s position vis-à-vis advertisers, publishers, middlemen and rivals, one of the people said, indicating further scrutiny of the case. French antitrust agency concluded last week.

Last year, Google generated $ 147 billion (roughly Rs 10.8 lakh) in revenue from online advertising, more than any other company in the world. Ads on its properties, including search, YouTube, and Gmail, accounted for the bulk of sales and profits.

About 16% of the revenue came from its display or network business, in which other media companies use Google technology to sell advertisements on their website and apps.

Both units are under fire. The US Department of Justice, joined by some states, sued Google last year for abusing its dominance in search ads. A Texas-led group of states in a subsequent lawsuit focused on anti-competitive behavior on the network side of the house.

Last week, France settled with Google $ 268 million (roughly Rs.1987 crore) and various liabilities over similar allegations related to network activity, and the unit is also to work closely with the regulator. UK competition over upcoming software changes as part of a settlement reached days later.

The Commission declined to comment. Google did not immediately respond to a request for comment.

A new EU investigation could end up targeting Google’s entire advertising empire. EMarketer market research expects Google to control 27% of global online ad spend this year, with 57% for search ads and 10% for display.

While the numbers don’t seem monopolistic at first glance, advertisers and rivals argue that Google’s various software plays a role in so many facets of the market that the company cannot be avoided.

They say Google is taking advantage of the dependence of buyers, sellers and middlemen on it to extract high fees from all sides and prevent its rivals from competing fairly.

In a questionnaire sent to Google competitors and third parties earlier this year and consulted by Reuters, the EU watchdog asked whether advertisers receive discounts when they use Google intermediaries, which allow advertisers to advertisers or multimedia agencies purchase advertising inventory from many sources.

The Commission should close current cases before starting new ones, said Thomas Hoppner, a partner at Hausfeld law firm, who is advising several plaintiffs against Google.

“From a practitioner’s perspective and from an industry perspective, it seems just as important to end Google’s local search and job search investigations when other authorities have opened investigations into Google’s adtech, ”he said.

© Thomson Reuters 2021



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