The European Commission, the antitrust regulator of the European Union (EU), is considering ordering Google, a subsidiary of Alphabet Inc. [GOOG:US], to divest part of its advertising-technology business due to concerns of anticompetitive practices, as reported by Reuters on June 12. Sources familiar with the matter revealed that the Commission could announce formal charges against Google as early as June 14. The charges are expected to allege that Google abuses its dominant position as a broker, supplier, and online auctioneer of digital ads on third-party websites and apps. It is rare for the Commission to order significant divestitures in antitrust cases, which are usually settled with fines and orders to change behavior. According to the source, the regulator believes Google has not taken obvious behavioral changes to address the antitrust concerns.
Google has already faced three EU antitrust fines since 2017, totaling over EUR8bn (USD8.64bn). The EU’s recent antitrust complaint against Google stemmed from a probe into the company’s ad-tech businesses in 2021. The probe examines whether Google impeded competitors’ access to user data for online advertising and potentially monopolized data for its own benefit. Google’s ad-tech business accounted for roughly 14% of its advertising revenue, which amounted to USD54.5bn in the first quarter of the year. In addition to the EU investigation, the UK’s Competition and Markets Authority (CMA) is also investigating whether Google has abused its dominant position in the ad-tech industry. Moreover, the US Department of Justice filed a lawsuit against Google in January 2023, accusing the company of anticompetitive behavior and monopolistic practices in the ad-tech industry.