Google's ads business under threat from EU Commission
Google, the search engine, web, and mobile giant, may be required to sell off part of its ad business following a ruling by the European Commission (EU). The EU has accused Google's ad tech services of breaching regulations through anti-competitive practices, including favoring its services over others. In 2022, Google's ad revenue reached approximately $224.5 billion, encompassing services like YouTube Adverts and Google Ad Manager.
The European Commission opened an investigation in June 2021 to assess whether Google's ad tech value chain conduct violated EU competition rules. During a recent press conference, Margrethe Vestager, Vice-President of the EU Commission, stated, "We found that Google may have abused its dominant position by favoring its own ad tech services." If the Commission determines that Google acted illegally, it could require the company to divest part of its services, potentially including its sell-side tools, DFP and AdX, to eliminate conflicts of interest.
Google has faced fines and orders to rectify anti-competitive practices in the past. South Korea was fined over $32 million for alleged practices that hindered a local alternative app store called One Store. The European Commission's actions could have significant consequences for Google, given the company's heavy reliance on advertising revenue to sustain its business.
The outcome of the European Commission's judgment regarding Google's potential breach of anti-competitive regulations remains uncertain. However, this development presents a significant ultimatum for the company. Despite previous attempts to address concerns and cooperate with the European Commission, stronger measures may now be pursued against the search giant.
The European Commission's website provides a transcription of Vestager's full remarks and additional information on the process.
Source: Iwan Morris, Staff Writer at PocketGamer