Google may be forced to sell part of its adtech business to address charges that it favored its own digital advertising services to the detriment of competitors, advertisers, and online publishers.
With Google holding a dominant position in the market with its publisher ad server and ad buying tools, as well as operating the largest ad exchange, the European Commission (EC) said in a statement that it believed that “only the mandatory divestment by Google of part of its services would address its competition concerns.”
In addition, Google could face a fine of up to 10% of the company’s annual worldwide turnover, said the EC, which is investigating complaints that Google breached EU antitrust rules.
In a news conference, EU antitrust chief, Margrethe Vestager, elaborated on their view, saying, “Google could divest its sell-side tools, DFP and AdX. By doing so, we would put an end to the conflicts of interest."
"Of course I know this is a strong statement but it is a reflection of the nature of the markets, how they function, and also why a behavioral commitment seemed to be out of the question,” she added.
The developments represent a potentially major blow to Google’s most lucrative business as Google’s advertising services, including from YouTube Ads, Google Ad Manager, and AdSense, accounted for 79% or over $200 billion of total revenue in 2022.
Google, meanwhile, said the Commission’s charge, which was relayed in a statement of objections, was not new and focused on a narrow aspect of their advertising business.
“It fails to recognize how advanced advertising technology helps merchants reach customers and grow their businesses — while lowering costs and expanding choices for consumers,” said Google VP for Global Ads, Dan Taylor, in a blog post.
“We look forward to showing how we have enabled higher-quality, more effective digital ads that have helped fund broader access to content and information online for everyone,” he added.
As part of the EC’s investigation process, Google can respond to the charge in writing and request a hearing within a few months, after which the Commission will make its decision.