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Google's ads business under threat from EU Commission

The European Commission has sparred with Google before
Google's ads business under threat from EU Commission
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Search-engine, web and mobile giant Google may be forced to sell off part of its ad business based on a ruling by the EU’s European Commission.

The European Commission has accused Google’s adtech services of having breached regulations with anti-competitive practices, including prioritising its own services over others. In 2022 Google’s ad revenue equaled around $224.5 billion, and includes services such YouTube Adverts and Google Ad Manager.

“In June 2021 the commission opened an investigation, we wanted to assess whether Google’s conduct in the adtech value chain violates EU competition rules. We found that Google may have abused its dominant position, by favouring its own adtech services,” said vice-president of the EU commission, Margrethe Vestager in a press conference earlier today.

“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 conflict of interest,” she added.

Hot water for Google

This is not the first time that Google has been fined or received an order to rectify anti-competitive practices. In South Korea, Google was fined over $32 million for practices that allegedly stymied local alternative app store, One Store. The move by the European Commission, however, may be one of the biggest yet as Google is heavily reliant on their advertising revenue to support their business.

At this stage it is still unclear whether the European Commission judgement will indeed find that Google breached anticompetitiveness regulations. However, this sets a stark ultimatum for the company and it may be that after Google attempted to allay fears and work with the European Commission directly, that they are now choosing a much stronger course of action against the search giant.

A transcription of the full remarks by Vestager is available on the European Commission’s website, as well as information detailing the process.