Google Faces Mounting Antitrust Pressure as European Regulators File Charges

Photo by Mitchell Luo

In the latest episode of Google’s ongoing antitrust saga, European regulators have filed charges against the tech giant, alleging that its ad-tech business is in violation of EU antitrust laws. The potential consequences for Google are substantial, as the company could face hefty fines of up to 10% of its annual global revenue, which translates to a staggering $28 billion based on its 2022 earnings.

The European Commission has taken issue with Google’s alleged favoritism of its own online display advertising technology services, claiming that this practice has been to the detriment of competing providers, advertisers, and online publishers. The commission’s statement asserts that Google has abused its dominant position in the market since at least 2014.

Responding to the charges, Dan Taylor, Google’s VP of global ads, downplayed the significance of the allegations in a blog post. He referred to them as “claims that are not new and relate to a narrow part of our advertising business.” Taylor expressed Google’s eagerness to demonstrate how their digital ads have contributed to higher quality and more effective advertising while promoting access to online content and information for all users.

Interestingly, this development mirrors a similar antitrust lawsuit brought against Google by the Department of Justice (DOJ) in the United States. The DOJ claims that Google retains a substantial portion of the revenue generated from advertisers to publishers, pocketing at least 30 cents of every dollar exchanged.

Margrethe Vestager, the European Commissioner responsible for overseeing competition, voiced concerns about Google’s control over the adtech market, emphasizing that if confirmed, such practices would be deemed illegal. Vestager tweeted that “Google controls both sides of the #adtech market: sell & buy,” implying that the company may have abused its dominant position to favor its own AdX platform.

While the DOJ seeks to compel Google to divest or sell its sell-side business in the United States, the European Commission’s demands are somewhat more ambiguous. They call for a “mandatory divestment by Google of part of its services” to address the competition concerns raised.

This is not the first time Google has clashed with European authorities over antitrust issues. In 2018, the company was hit with a substantial $4 billion antitrust fine related to its Android mobile operating system. Google has twice appealed this decision. Additionally, in 2019, the tech giant faced a separate $1.7 billion antitrust fine relating to its advertising business, demonstrating a pattern of ongoing scrutiny by European regulators.

As the antitrust battle intensifies on both sides of the Atlantic, Google finds itself at the center of a high-stakes conflict that could have far-reaching implications for the company’s future operations and market dominance.

 

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