Google’s advertising technology practices breach EU antitrust laws, the European Commission said Wednesday as it suggested the tech company break up its adtech business.
The European Commission said a preliminary investigation found that Google has “abused its dominant position” in the adtech market since at least 2014.
It claims
Alphabet
‘s (ticker: GOOGL) Google has been favoring its own online display-advertising technology services “to the detriment of competing providers of advertising technology services, advertisers an online publishers.”
Dan Taylor, Google’s vice president of global ads, said the company disagrees with the commission’s view and “will respond accordingly.”
Google collects users’ data, sells advertising space on its own website and apps, and acts as an intermediary between advertisers and publishers. “So Google is present at almost all levels of the so-called adtech supply chain,” said Margrethe Vestager, the EU’s executive vice president in charge of competition policy.
The commission said Google favors its own ad exchange—AdX—in the ad selection auction run by its own publisher, by “informing AdX in advance of the value of the best bid from competitors.” It also claims Google’s ad buying tools avoid competing ad exchanges, making AdX the most attractive exchange.
The commission said that only a mandatory divestment of part of its services would address its competition concerns.
“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,” Vestager said.
“If confirmed, Google’s practices would be illegal under our competition rules,” she added.
Taylor said in in a statement emailed to Barron’s that Google’s adtech tools help websites and apps fund their content, and enable businesses to effectively reach new customers. “Google remains committed to creating value for our publisher and advertiser partners in this highly competitve sector,” he said.
Write to Callum Keown at [email protected]
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