Google must break up digital ad business over competition concerns, European regulators say
BRUSSELS (AP) — European Union antitrust regulators made a groundbreaking move on Wednesday, targeting Google's highly profitable digital advertising business. In an unprecedented decision, the European Commission, the executive branch responsible for enforcing antitrust laws within the EU, stated that Google must take measures to address competition concerns by divesting a portion of its ad business.
After conducting an investigation, the Commission expressed its preliminary view that the sole satisfactory resolution would be the compulsory divestment of certain Google services to alleviate the identified concerns.
The European Union, comprising 27 member states, has been at the forefront of the global movement to impose stricter regulations on major technology companies. This has included the introduction of groundbreaking rules concerning artificial intelligence. However, in the past, the EU has primarily relied on imposing significant fines, including several multi-billion euro (dollar) antitrust penalties on Google.
This marks the first instance where the EU has explicitly demanded the separation of crucial segments of a tech giant's operations due to violations of the EU's stringent antitrust laws. Nevertheless, specific details regarding the proposed restructuring have not yet been disclosed.
Google now has the opportunity to present its defense and arguments before the commission reaches a final decision. In response to the EU's findings, the company expressed its disagreement and stated that it would provide a response accordingly. It is worth noting that the EU investigation primarily focuses on a specific aspect of Google's 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, Google vice president of global ads. "Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector."
“Google is representing the interests of both buyers and sellers. And at the same time, Google is setting the rules on how demand and supply should meet,” she said at a news conference." This gives rise to inherent and pervasive conflicts of interest.”
The commission's investigation primarily targeted YouTube, examining whether Google leveraged the video-sharing site's dominant position to give preferential treatment to its own ad-buying services through the imposition of restrictions on competitors. In addition, Google's ad tech business is currently being investigated by Britain's antitrust watchdog and is facing legal action in the United States.
It's worth noting that Brussels has previously imposed fines exceeding 8 billion euros (now $8.6 billion) on Google in three distinct antitrust cases, which involved its Android mobile operating system as well as its shopping and search advertising services.