Google’s advertising business should be broken up, European Union officials said Wednesday, alleging that the tech giant’s involvement in multiple parts of the digital advertising supply chain creates “inherent conflicts of interest” that risk harming competition.
The formal accusations mark the latest antitrust challenge to Google over its sprawling ad tech business, following a lawsuit by the US Justice Department in January that also called for a breakup of the company.
The EU Commission has submitted its allegations to Google in writing, officials said, kicking off a legal process that could potentially end in billions of dollars in fines in addition to a possible breakup that could impact part of its core advertising business.
The commission alleges that since 2014, Google has unfairly boosted its own proprietary ad exchange — the online auction house known as AdX that matches advertisers and publishers — through its simultaneous ownership of some of the most popular ad tools for publishers and advertisers.
For example, the commission claims, advertisers who used Google’s ad buying tools frequently had their purchases routed to AdX instead of to rival ad exchanges.
Meanwhile, Google’s publisher-facing tools unfairly gave AdX a leg up over rival ad exchanges, the commission alleged, because Google’s publisher tools gave AdX competitive bidding information that the exchange could use to help advertisers win an auction.
One proposed solution by the commission would spin off Google’s ad exchange and publisher tools from the ad-buying tools it provides to advertisers.
“@Google controls both sides of the #adtech market: sell & buy,” tweeted Margrethe Vestager, the commission’s top competition official. “We are concerned that it may have abused its dominance to favour its own #AdX platform. If confirmed, this is illegal.”
In a statement, Dan Taylor, Google’s vice president of global ads, said the EU’s probe “focuses on a narrow aspect of our advertising business,” that the company opposes the commission’s preliminary conclusions and that Google plans to “respond accordingly.”
“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector,” Taylor said.
A Google spokesperson told CNN Wednesday that the company has only just received the commission’s complaint and that it will take time to review the commission’s claims. Google also added that it will oppose calls for a breakup.