Antitrust regulators accused Google of breaching the rules with its lucrative digital advertising business.
European Union regulators said on Wednesday that Google had breached antitrust laws with its highly profitable digital advertising business that serves as its main revenue source.
The US multinational should sell off part of its business in order to address the competition concerns, the European Commission suggested.
“Google has a very strong market position in the online advertising technology sector. It collects users’ data, it sells advertising space, and it acts as an online advertising intermediary,” said Margrethe Vestager, the EU’s executive vice president in charge of competition policy .
“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. If confirmed, Google’s practices would be illegal under our competition rules,” she added.
Google is both a seller of digital ads and an intermediary between advertisers who want to place ads with third-party websites and publishers.
EU regulators are accusing Google of favoring its own ad exchange AdX, stating that this violates EU rules prohibiting “the abuse of a dominant market position.”
The company is on both the supply and demand side of digital advertising, creating “inherent conflicts of interest”, the Commission added.
In a statement provided to Euronews, Dan Taylor the vice president of global ads for Google, said that the company’s “advertising technology tools help websites and apps fund their content and enable businesses of all sizes to effectively reach new customers.”
“Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector. The Commission’s investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC’s view and we will respond accordingly,” Taylor added.
Vestager said that it was “quite rare that we ask for a divestiture and we have not been asked for it yet,” but emphasized that the EU could do so if their concerns were found to be true.
EU regulators began investigating possible antitrust issues at Google two years ago.
Google also faces litigation in the US and an investigation in the UK over its ad business.