On June 14, the European Commission notified Google of its preliminary view that the company breached EU antitrust rules by distorting competition in the advertising technology industry (‘adtech’). The European Commission comes under the European Union.
After two years of investigation, Commission sent the charges in a statement of objections. On June 22 2021, the Commission opened formal proceedings into possible anticompetitive conduct by Google in the online advertising technology sector.
The Commission started its investigation as it suspected Google of violating EU antitrust rules. Article 102 of the TFEU (Treaty on the Functioning of the European Union) prohibits the abuse of a dominant position. These provisions are implemented in the Antitrust Regulation (Council Regulation No 1/2003), which the national competition authorities can also apply.
In a press release, the European Commission stated that “The Commission takes issue with Google favouring its own online display advertising technology services to the detriment of competing providers of advertising technology services, advertisers and online publishers”.
In its preliminary finding, the Commission found that Google abused its dominant position since at least 2014. Google misused its dominant positions by:
- “Favouring its own ad exchange AdX in the ad selection auction run by its dominant publisher ad server DFP by, for example, informing AdX in advance of the value of the best bid from competitors, which it had to beat to win the auction.
- Favouring its ad exchange AdX in the way its ad-buying tools Google Ads and DV360 place bids on ad exchanges. For example, Google Ads was avoiding competing ad exchanges and mainly placing bids on AdX, thus making it the most attractive ad exchange”.
The Commission is worried that “Google’s allegedly intentional conduct to give AdX a competitive advantage may have foreclosed rival ad exchanges. This would have reinforced Google’s AdX central role in the ad tech supply chain and Google’s ability to charge a high fee for its service”.
If the charges are confirmed against Google, their conduct would “Infringe Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’) that prohibits the abuse of a dominant market position”.
In this particular case as per the preliminary finding, “A behavioural remedy is likely to be ineffective to prevent the risk that Google continues such self-preferencing conducts or engages in new ones. 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. Furthermore, it operates the largest ad exchange. This leads to a situation of inherent conflicts of interest for Google.
Therefore, the Commission’s preliminary view is that “only the mandatory divestment by Google of part of its services would address its competition concerns”. The Statement of Objections sent to Google does not prejudge the outcome of an investigation.
Recently in May, the Indian government intended to take action against Alphabet Inc.’s Google, according to Union IT Minister Rajeev Chandrasekhar, who was speaking to the media; last year, an antitrust watchdog discovered that Google had abused its market position by engaging in anti-competitive practices.
In October 2022, India’s antitrust body, the Competition Commission of India (CCI), fined Google $275 million in two cases, which involved abusing its dominant position in the Android operating system market and pushing developers to use its in-app payment system.
According to Rajeev Chandrasekhar, the Union IT Minister, such findings are “serious” and give the Indian federal government “deep concern. The government would take their own action against Google, even “the ministry has to take action”.
He said that the matter is serious and will take necessary action, “We have thought through it. You will see it in the coming weeks. Certainly, it’s not something that we will leave and push under the carpet”.
