The EU’s Potential Breakup of Google’s Ad Business for Antitrust Violations

Europe accuses Google of abusive practices in online advertising
The European Commission has accused Google of engaging in “abusive practices in online advertising technology” that could potentially lead to its ad business being split up. In a statement of objections, the EU found that Google is unlikely to change its behavior and that only the “mandatory divestment” of part of its services would address competition concerns.
Google’s dominance and alleged abuse
Executive VP Margrethe Vestager stated, “Google is present at almost all levels of the so-called adtech supply chain.” The preliminary concern is that Google may have used its market position to favor its own intermediation services, potentially harming competitors, publishers, and increasing advertisers’ costs.
Multiple attacks on Google’s ad business
Google’s ad business is facing challenges on various fronts. Earlier this year, the US Department of Justice filed a lawsuit against Google, accusing it of illegally monopolizing the market. This legal action has led to key ad tech rivals leaving the market, discouraging new entrants, and leaving remaining competitors at a disadvantage.
EU Commission’s stance on Google’s behavior
The EU Commission highlighted Google’s dominance in various parts of adtech, including services for advertisers and publishers, as well as the ad exchange AdX. The Commission accused Google of abusing its market position by ensuring that its buy- and sell-side intermediation tools favored its own exchange, AdX, potentially engaging in anticompetitive conduct.
Potential remedies and response from Google
The EU Commission indicated that any remedy requiring Google to change its behavior would be ineffective and suggested that only the divestment of part of its services could address competition concerns. Google will have the opportunity to respond to the complaint before any judgment is made. In addition to a potential split of the company, Google could face a fine of up to 10 percent of its yearly global turnover.