EU takes on Google's ad business with antitrust probe

The European Commission is starting an investigation into Google to determine if the search giant violated antitrust rules by favoring its own advertising business in online ad auctions it manages.

Google has been dealing with antitrust lawsuits about its advertising technology and dominance in the industry in the United States, but it appears that the same thing may happen in Europe too. The European Commission said on Tuesday it will be examining Google for signs of "possible anticompetitive conduct" with its ad business.

The investigation will look into "whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use." The investigation has no set deadline, according to CNBC, but if evidence of wrongdoing is determined, it could lead to a hefty fine against the company.

Pointing out how advertising is central to Google's business, Google's data collection, and how it both sells advertising space and acts as an intermediary for others, executive VP of the European Commission and head of competition policy Margrethe Vestager highlights that Google is "present at almost all levels of the supply chain for online advertising."

"We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack," Vestager continued. "A level playing field is of the essence for everyone in the supply chain. Fair competition is important - both for advertisers to reach consumers on publishers' sites and for publishers to sell their space to advertisers, to generate revenues and funding for content."

The competition chief also said the probe would look into Google's policies regarding user tracking.

A statement from reads "Thousands of European businesses use our advertising products to reach new customers and fund their websites every single day. They choose them because they're competitive and effective. We will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers."

Google's existing lawsuit in the United States seemed to uncover evidence of a secret program called "Bernanke," which used historical bidding data to enable its ad-buying system to have an advantage over rivals using Google's own system. The program was believed to earn Google hundreds of millions of dollars in extra revenue each year.

The company has also been hit by a fine in June, settling with the French competition authority for 220 million euros ($267.5 million) to end another probe into its advertising system. As part of the settlement, Google said it would change its policies and how its advertising business worked in the country to encourage more competition.

The antitrust probe isn't the only activity from the European Union that could affect Google. The European Commission has been working on new legislation to impose stricter regulations on tech giants like Google and Apple, aimed at curbing their power and to foster a more competitive business environment.

In June, European Parliament lawmaker Andreas Schwab wanted to redefine definitions of "online gatekeepers" that would be subject to the rules. This would include adjusting the annual turnover from European business from its current level of more than $8 billion in the last three years to $12.22 billion, while the market value level of $80 billion for the previous financial year should be raised to at least $122.2 billion.

While the lower levels would have applied to many major organizations across the US, EU, and Asia, the higher levels were more likely to limit the laws to impact just the biggest firms, namely the so-called tech giants.

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