Google could be forced to break up parts of its business empire after the European Union accused the search giant of abusing its dominant position in digital ads business and ‘distorting’ the competition.
The European Commission, the bloc’s executive branch and top antitrust enforcer, said in a preliminary finding on Wednesday after a two years investigation that “only the mandatory divestment by Google of part of its services” would address the concerns.
Google said in a statement that it disagreed with the initial findings.
Margrethe Vestager, Vice President of European Commission, said Google is dominant on both sides of the ad-selling market and the search giant is abusing its position by favouring its own ad exchange, reinforcing its ability to charge a high fee for its services.
“Google is representing the interests of both buyers and sellers. And at the same time, Google is setting the rules on how demand and supply should meet,” she said at a news conference. “This gives rise to inherent and pervasive conflicts of interest,” reported AP quoting Vestager as saying.
If Google sold off its real-time marketplace for buying and selling ads or a tool for publishers to manage their ads, “we would put an end to the conflicts of interest,” Vestager added.
Vestager further said the commission is seeking a forced sale because fines and requirements for Google to stop anti-competitive practices have not worked in past cases, allowing Google to continue its old behaviour, “just under a different disguise.”
Rich Stables, CEO of rival search engine Kelkoo said, “This is a big deal” and a sign that the commission has “lost all trust in Google and lost all trust in those behavioural remedies” mandating changes to the way it operates. Stables was involved in two of the EU’s previous antitrust cases against Google.
Google can now defend itself by making its case before the commission issues its final decision.
Google said it disagreed with the finding and “will respond accordingly”, adding that the EU’s investigation focused on a narrow part of its ad business.
“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” AP reported quoting Dan Taylor, Google vice president of global ads.
“Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector.”
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Updated: 15 Jun 2023, 02:39 AM IST
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