EU may force Google to sell part of its adtech business

EU regulators said on Wednesday that Alphabet’s Google may have to sell part of its adtech business to address concerns about anti-competitive practices.

The European Commission is threatening Google with its harshest regulatory penalty to date.

The Commission set out its charges in a statement of objections to Google two years after opening an investigation into behaviours such as favouring its own advertising services.

The moves could lead to a fine of as much as 10% of Google’s annual global turnover.

Google’s adtech business accounted for 79% of total revenue last year.

According to Reuters, Google’s 2022 advertising revenue including from search services, Gmail, Google Play, Google Maps, YouTube adverts, Google Ad Manager, AdMob and AdSense, amounted to $224.5 billion.

EU competition commissioner Margrethe Vestager said: “Today, the Commission has sent a Statement of Objections to Google.

“We are concerned that Google may have illegally distorted competition in the online advertising technology industry, also known as ‘Adtech’.

“In June 2021, the Commission opened an investigation. We wanted  to assess whether Google’s conduct in the ad tech value chain violates EU competition rules.

“We found that Google may have abused its dominant position by favouring its own adtech services …”

Vestager added: “Should the Commission conclude that Google acted in an illegal manner, it might require Google to divest part of its services.

“For instance, Google could divest its sell-side tools, DFP and AdX. By doing so, we would put an end to the  conflicts of interest.”

Dan Taylor, Google’s vice-president of global ads, said in a statement: “Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector.

“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.”