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EU antitrust authorities are ready to strike Google's advertising business | Tec...

 1 year ago
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EU antitrust authorities are ready to strike Google's advertising business

The European Union is going all in, and Google could lose a lot of money... or worse

By Alfonso Maruccia June 13, 2023, 12:59 PM
EU antitrust authorities are ready to strike Google's advertising business
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Something to look forward to: The feud between Europe's competition authorities and Google is nearing its conclusion, and Brussels is seemingly preparing a formal antitrust complaint against the US corporation. Google's online advertising empire could be shaken by a huge fine, or even be forced to change its anti-competitive ways.

According to people familiar with the matter, the European Union could announce its formal antitrust complaint against Google in the coming days. An official complaint would bring an end to a lengthy investigation by the European Commission (which is part of the executive branch of the European Union) over Mountain View's anti-competitive practices in the online advertising market.

Advertising is the main revenue drive for Google. In 2022 alone, online ads accounted for 80 percent of Alphabet's total revenues amounting to $225 billion. In 2020, advertising revenues were $168.6 billion. But Google's most successful business – and essentially the only profitable one – could be hindering competition, and the EU is finally ready to hold the Mountain View company accountable.

Brussels authorities started to look into Google's ad practices in 2021, trying to understand if the company had obstructed competing companies from accessing user data for online advertising. Google's ad service (Google Ads) has long been the main platform for online targeted advertising, selling ad space and providing advertisers and publishers a common ground as well.

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Google's partnership with Meta/Facebook in the Open Bidding program was originally part of the EU investigation, but it was ditched in 2022. New evidence provided by Portuguese competition authorities was later added to the European investigation. Mountain View's advertising empire is also part of litigation in the UK and US.

A formal complaint by the EU could very much put a dent in Google's main business, as fines for antitrust violation can reach as much as 10 percent of a company's overall sales. Monetary fines imposed by Brussels have costed Google more than €8 billion (or $8.6 billion) so far.

The European Commission could also force Google to change its business practices and company structure, which could be even more damaging to Alphabet's exclusive cash cow than a financial penalty. Everything will likely be decided soon, perhaps as early as tomorrow.


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