Google faces EU antitrust order over anti-competitive adtech practices

BRUSSELS, June 14 (Reuters) – Alphabet’s ( GOOGL.O ) Google may be required to sell part of its lucrative adtech business to address concerns about anti-competitive practices, EU regulators said on Wednesday.

Two years after launching an investigation into behavior favoring its own ad services, the European Commission announced its charges in a statement of objections against Google, which could lead to a fine of 10% of Google’s annual global revenue.

The stakes are high for Google in this latest clash with regulators, as the company’s biggest moneymaker comes from its ad business, which accounted for 79% of total revenue last year.

2022 advertising revenue is $224.5 billion, including search services, Gmail, Google Play, Google Maps, YouTube Ads, Google Ad Manager, AdMob and AdSense.

Google has a few months to respond to this charge. It could hear a closed hearing before senior commission antitrust officials and their national counterparts before the EU issues a decision in a process that could take a year or more. The company can solve by offering stronger solutions than previously proposed.

EU antitrust chief Margrethe Vestager said Google may have to sell part of its adtech business because a behavioral settlement would not be effective in stopping anti-competitive practices.

“For example, Google can divest its sell-side tools, DFP and AdX. By doing so, we will end conflicts of interest,” he told a news conference.

“I know that’s a strong statement of course, but it’s the nature of markets, how they work and why a behavioral commitment seemed out of the question.”

Google said it disagreed with the commission’s allegation.

“The Commission’s investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC’s opinion,” Dan Taylor, Google’s vice president of global ads, said in a statement.

Vestager said Google introduced privacy sandbox tools to block third-party cookies in its Chrome browser and that investigations would continue into its plan to stop providing advertising identifiers to third parties on Android smartphones.

He said the EU cooperated closely with competition authorities in the US and UK.

The Council of European Publishers, which complained to the commission last year, welcomed the accusation.

The commission said Google favors its own online display ad technology services to the detriment of competing providers of ad technology services, advertisers and online publishers.

Since 2014 Google has abused its dominance by favoring its own ad exchange AdX in ad selection auctions by its dominant publisher ad server DFP, and its ad buying tools Google Ads and DV360 in the ad exchanges in favor of AdX. .

According to research firm Insider Intelligence, Google is the world’s dominant digital advertising platform with a market share of 28% of global ad revenue.

Google tried to settle the case three months after the investigation began, but regulators were frustrated by the slow pace and lack of substantial concessions, a person familiar with the matter previously told Reuters.

Reporting by Fu Yun Che, additional reporting by Sudip Khar-Gupta; Editing by Philip Blenkinsop, Kirsten Donovan and Lisa Schumacher

Our Standards: Thomson Reuters Trust Principles.