Google’s advertising business continues to face troubles as both the European Union (EU) and US antitrust regulators are calling for its breakup. Both governments agree that Google’s dominance in advertising technology needs to come to an end. The EU recently joined the US Department of Justice in advocating for a breakup as a viable solution to address the alleged monopoly abuses by the California-based tech giant. The EU’s investigation found that behavioral remedies would not be sufficient to prevent Google from favoring its own services over ad tech rivals, advertisers, and online publishers. Margrethe Vestager, the EU’s antitrust commissioner, emphasized that divestiture is the only effective approach. This complaint by the EU adds to the penalties totaling over €8 billion that Google has already faced in the region.
A potential divestiture order would directly impact one of Google’s major revenue streams, particularly its business of facilitating ad placements on third-party websites. The EU argues that since 2014, Google has been favoring its own advertising exchange platforms and abusing its access to information on rival bids, thereby harming other ad exchanges. The EU complaint highlights Google’s dominant position in both the publisher ad server and ad buying tools, as well as its operation of the largest ad exchange, creating inherent conflicts of interest.
The EU suggests various options for a potential breakup, including separating Google Ads and DV360 from DoubleClick (a service for publishers) and its advertising marketplace AdX. This aligns with the US Department of Justice’s January lawsuit, which also called for a company breakup. The US agency alleges that Google’s advertising technology dominance allows it to retain a significant portion of advertisers’ spending. To address the concerns raised by regulators, Google may refer to an agreement reached with the French competition regulator as a less-intrusive remedy for the alleged abusive behavior, in an attempt to gain favor with regulators in both the US and EU.
