EU says Google ‘abused its position’ in ad market as it demands break-up in services

The bloc’s competition regulator has said the tech giant should sell off its ad purchasing arms, Google Ads and DV 360, in order to reduce the conflict of interest they have with its online ad sales and auction arms, AdX and DFP.

A break-up of its ad businesses could come as a huge blow to Google, with its advertising empire worth as much as 80% of its annual turnover. The EU can impose a fine of up to 10% of Google annual worldwide turnover if it judges that the firm has breached competition law.

The Competition Commission said Google was favouring AdX over rivals in order to make it the most attractive ad exchange, which it considered to be an abuse of its dominant position in the market.

The regulator said: “A behavioural remedy is likely to be ineffective...the Commission’s preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns.”

Margrethe Vestager, Executive Vice-President in charge of competition policy, said: “Our preliminary concern is that Google may have used its market position to favour 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.”

Google’s VP of global ads, Dan Taylor, said he took issue with the EU’s view. “Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” he said.

“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.”

Google’s practices in the online advertising market are also under investigation in the UK, with a probe launched last month by the Competition and Markets Authority.

Andrea Coscelli, the CMA’s Chief Executive, said: “We’re worried that Google may be using its position in ad tech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers.

“This would be bad for the millions of people who enjoy access to a wealth of free information online every day.”