Google’s troubles mount, as EU joins US’ breakup call

Google‘s advertising business troubles refuse to end. With European Union joining US antitrust regulators breakup call. Both the governments seemingly agree on one thing: The era of Google’s dominance in advertising technology must end. The European Commission recently joined the Department of Justice in touting a breakup as a viable remedy for the California-based tech giant’s alleged monopoly abuses. In its probe, the EU said a divestment is needed because a behavioral remedy wouldn’t stop Google from “self-preferencing.”

“Divestiture is the only way,” Margrethe Vestager, the EU’s antitrust commissioner, told reporters after firing off a charge sheet accusing Alphabet Inc’s Google of favoring its own services to the detriment of ad tech rivals, advertisers and online publishers. The EU complaint is the latest escalation in the long-running saga of penalties totaling more than €8 billion ($8.8 billion) faced by Google in the region.

Hurt Google’s biggest business
A selloff order would strike at the heart of one of Google’s biggest money spinners. While the company’s majority revenue comes from ads on search results, the EU and US antitrust cases focus on a lucrative segment of its business that involves facilitating the placement of ads on other websites.

Why EU want to break Google
The EU’s competition chief argued that since 2014, Google has favored its own advertising exchange platforms by abusing access to information on rival bids for ad space. This has harmed other ad exchanges by placing bids for advertising on its own platforms. In its complaint, EU said that Google “is active on both sides of the market with its publisher ad server and with its ad buying tools and holds a dominant position on both ends.” It also “operates the largest ad exchange. This leads to a situation of inherent conflicts of interest for Google.”

How the Google breakup may take place
One option according to the EU commission for a split down is to force the company to separate its ad-purchasing platforms Google Ads and DV360 from DoubleClick — its service for publishers to find advertisers — and its advertising marketplace AdX.

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The EU’s view echoes the January lawsuit by the Department of Justice, which called for a company breakup for the first time since the late 1990s when it unsuccessfully sought to force Microsoft Corp to sell off some of its computer software operations. The US agency alleges that Google’s dominance over advertising technology allows it to keep at least $0.30 out of every dollar advertisers spend through its online advertising tools. The department’s last major breakup came when the Bell telecoms systems was dismantled in the 1980s.

The company may also lean on an agreement that was brokered with the French competition regulator in order to convince regulators in Washington and Brussels of a less-intrusive remedy to the alleged abusive behavior.

(With agency inputs)

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Google‘s advertising business troubles refuse to end. With European Union joining US antitrust regulators breakup call. Both the governments seemingly agree on one thing: The era of Google’s dominance in advertising technology must end. The European Commission recently joined the Department of Justice in touting a breakup as a viable remedy for the California-based tech giant’s alleged monopoly abuses. In its probe, the EU said a divestment is needed because a behavioral remedy wouldn’t stop Google from “self-preferencing.”

“Divestiture is the only way,” Margrethe Vestager, the EU’s antitrust commissioner, told reporters after firing off a charge sheet accusing Alphabet Inc’s Google of favoring its own services to the detriment of ad tech rivals, advertisers and online publishers. The EU complaint is the latest escalation in the long-running saga of penalties totaling more than €8 billion ($8.8 billion) faced by Google in the region.

Hurt Google’s biggest business
A selloff order would strike at the heart of one of Google’s biggest money spinners. While the company’s majority revenue comes from ads on search results, the EU and US antitrust cases focus on a lucrative segment of its business that involves facilitating the placement of ads on other websites.

Why EU want to break Google
The EU’s competition chief argued that since 2014, Google has favored its own advertising exchange platforms by abusing access to information on rival bids for ad space. This has harmed other ad exchanges by placing bids for advertising on its own platforms. In its complaint, EU said that Google “is active on both sides of the market with its publisher ad server and with its ad buying tools and holds a dominant position on both ends.” It also “operates the largest ad exchange. This leads to a situation of inherent conflicts of interest for Google.”

How the Google breakup may take place
One option according to the EU commission for a split down is to force the company to separate its ad-purchasing platforms Google Ads and DV360 from DoubleClick — its service for publishers to find advertisers — and its advertising marketplace AdX.

Read Also

The EU’s view echoes the January lawsuit by the Department of Justice, which called for a company breakup for the first time since the late 1990s when it unsuccessfully sought to force Microsoft Corp to sell off some of its computer software operations. The US agency alleges that Google’s dominance over advertising technology allows it to keep at least $0.30 out of every dollar advertisers spend through its online advertising tools. The department’s last major breakup came when the Bell telecoms systems was dismantled in the 1980s.

The company may also lean on an agreement that was brokered with the French competition regulator in order to convince regulators in Washington and Brussels of a less-intrusive remedy to the alleged abusive behavior.

(With agency inputs)

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end of article