EU opens antitrust probe into Google's ad business

The European Union has opened an antitrust investigation into whether Google is stifling competition in the highly profitable online advertising market. The probe follows cases in France and elsewhere in Europe questioning how the company runs its ad business.

The European Commission has opened an antitrust investigation into Google's advertising practices. © Charles Platiau/Reuters

The European Commission said Tuesday that it has opened a formal investigation into whether Google violated the competition rules by favouring its own display advertising services over rivals.

“Online advertising services are at the heart of how Google and publishers monetise their online services,” said European Competition Commissioner Margrethe Vestager said in a statement.

Google collects data for targeted advertising, but it also sells ad space, acting as a middleman between advertisers and publishers, through its inventory auction service AdX and Doubleclick ad exchange platform, and other services.

The Commission will investigate whether Google restricts third parties’ access to user data on websites and apps, and keeps the information for its own ad services.

'Fair' competition

“We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack,” Vestager said, adding that the investigation will also look into Google’s user tracking polices “to make sure they are in line with fair competition”.

Google said in a statement that European customers choose their advertising services “because they’re competitive and effective” but said it would “engage constructively with the European Commission” in the investigation.

France’s competition regulator recently fined Google 220 million euros in a case brought by daily Le Figaro, along with News Corp and Belgium's Groupe Rossel, who argued their ad revenue was limited by Google’s favouring its own ad services.

Le Figaro dropped its complaint in November, but News Corp and Rossel continued, and the regulator ruled in their favour, finding that Google did give preferential treatment to its own services.

Ongoing investigation

There is no time limit on the EU’s investigation, which could lead to formal accusations, fines or an order for Google change its behaviour.

In the last several years, Google has been fined more than 8 billion euros by the commission for blocking rivals in online shopping, Android smartphones and online advertising.

Facebook is also being investigated by the European Union and Britain into whether it uses data from advertisers to unfairly dominate the online classifieds market.