US tech giant Google has been ordered to sell part of its advertising business by the EU competition regulator, amid concerns that the firm was favouring its own ad services over its competitors.
The move comes as the competition commission looks to crack down on big tech’s global market monopolies and is the result of a two-year investigation into the ad tech business.
It felt that the only way its concerns could be allayed would be if Google was forced to sell off segments of its ad tech holdings.
The investigation stated unequivocally that it believed the Alphabet-owned outfit had abused its monopoly in online advertising. It had done this by favouring its own ad exchange, AdX, in auctions held by its own server, DFP, as well as how its own ad-buying tools Google Ads and DV 360, placed bids on these exchanges.
Google’s control of the global ad market is certainly cause for concern if fair competition is to be maintained, with the US company currently holding a 28% share of global ad revenue.
“This market is a highly technical market. It is very dynamic. The detection of these behaviours can be very challenging. Each time a practice was detected, Google simply modified its behaviour so as to make it more difficult to detect but with the same objectives [and] with the same effects,” EU competition commissioner, Margrethe Vestager said.
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“Google is present at almost all levels of the so-called ad tech supply chain. Our preliminary concern is that Google may have used its market position to favour its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs.
She concluded: “It’s a reflection of how pervasive Google is in the value chain that we perceive that a divestiture is the only way to solve this. Google is in every part of this value chain. As we see it, they hold the dominant position both in the sell side and the buy side.
“We don’t see that this enhanced conflict of interest can be solved in other way [but] by not having ownership of the entire value chain.”
It is estimated that around four-fifths of the tech firm’s revenue comes from advertising, resulting from its ownership of various high-profile platforms such as YouTube, Google Maps, AdSense, and AdMob.
Responding to the ruling, vice-president of global ads, Dan Taylor said: “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. The commission’s investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC’s view and we will respond accordingly.”
