Google’s Online Advertising Practices Violate Antitrust Laws, E.U. Says
Google on Wednesday was charged with violating European Union antitrust laws by using its dominance in online advertising to undercut rivals, the latest in a string of cases around the world that strike at the core of the internet giant’s business model.
The case was brought by the European Commission, the executive branch of the 27-nation European Union, and marks the fourth time Google has been charged with violating European antitrust laws in recent years. In this instance, the E.U. accused Google of abusing itscontrol of the market for buying and selling online advertising.
The European Union announcement follows similar charges brought against Google in January by the U.S. Justice Department, which accused the company of illegally abusing a monopoly over the technology that powers online advertising. Britain’s antitrust authority has also been investigating Google’s advertising practices.
The outcomes of the cases could have significant implications for Google’s parent company, Alphabet, which reaped most of its $60 billion in profit last year from advertising. Advertising underpins nearly all of Google’s most popular services, including search, email, maps and Android, and allows the company to offer them for free.
“Google is present at almost all levels of the so-called adtech supply chain,” Margrethe Vestager, the executive vice president of the European Commission who oversees digital and competition policy, said in a statement. “Our preliminary concern is that Google may have used its market position to favor its own intermediation services.”
“Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs,” she added.
The new charges against Google are part of a long-running effort by the European authorities to clamp down on the world’s largest technology companies. Apple and Meta, which owns Facebook and Instagram, are also the subjects of antitrust investigations. Last year, the European Union passed new antitrust and digital services laws to tighten oversight of the biggest tech companies. And on Wednesday, the European Parliament, a legislative branch of the E.U., passed a draft law regulating artificial intelligence.
In recent years, the European authorities have fined Google billions of dollars over what they say are antitrust violations related to its Android mobile operating system, shopping service and another piece of its advertising business. All the cases remain tied up in court after legal appeals by Google.
With the new charges, the European Commission unveiled what is known as a “statement of objections” against Google, outlining why it believes the company has violated antitrust laws. It is one step in what could be a long process before final decisions are made about whether to impose a fine of up to 10 percent of Google’s global revenue or to order other changes to its business practices. A settlement could also be reached.
European regulators began investigating Google two years ago, focusing on the display advertising market, which includes the banners and other visual formats on websites. Google offers a number of services to advertisers and publishers in this sector. It collects data to target advertising, sells ad space on websites and offers products that serve as an intermediary between advertisers and publishers who own websites.
In controlling so much of the online advertising supply chain, Ms. Vestager has said Google makes it harder for rivals to compete. Publishers such as News Corp have long complained that Google’s dominance limits how much money they can generate from advertising put on their websites, or for rival services to emerge.
