April 17, 2021

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Brussels zeroes in on Google’s adtech business

3 min read
The European Commission is mulling two new probes into the tech giant.

Brussels is not done with Google and has added the advertising technology at the heart of the search giant’s business model to its long list of concerns. 

The advertising technology industry allows advertisers to buy access to consumers’ eyeballs within fractions of a second thanks to an automated process of bids, flashing up products in line with a browser’s supposed interests. While the business is hugely complex, it lies at the core of digital giants’ revenue models, and Google’s rivals have pushed the European Commission to pursue the company’s competitive practices in this area for more than five years.

After slapping the U.S. search giant with fines exceeding €8 billion in three antitrust cases, the European Commission is now running two more investigations into Google, according to a questionnaire seen by POLITICO.   

The first focuses on how the U.S. company gathers and uses data and the second one on how it behaves in the advertising business.

“The Commission has potential concerns with regard to the way Google is collecting, accessing, processing, using or monetising data,” the document reads.

The second case focuses on Brussels’ investigation into “Google’s practices in the advertising technology (“ad tech”) value chain, and its position in relation to advertisers, publishers and intermediaries, and competitors in search advertising, display advertising and ad tech services,” the document continues.

In the U.S. and the U.K., Google is under scrutiny for both its role in the adtech ecosystem and how it deals with data. 

The case numbers the questionnaire refers to do not appear on the European Commission’s registry, indicating the investigations are not publicly disclosed. This does not prejudge whether the probes will lead to charges and make headlines in the future, according to two EU officials.

However, the resources invested in the case show the Commission would like to open formal probes, said one of the EU officials. There are 11 people on the team in charge of the investigations, according to an internal document seen by POLITICO, which three Commission officials deemed very big.  

The existence of two separate cases means Google could face fines up to 10 percent of its annual turnover twice, should the Commission find another breach of competition rules. Over the last five years, Brussels has sanctioned Google for favoring its own search engine (€2.42 billion), using its Android mobile operating system to strengthen its dominance (€4.34 billion), and engaging in abusive practices in online advertising (€1.49 billion). 

Focus on adtech

Brussels has been zeroing in on data for a couple of years, following the conclusions of a report on digital competition commissioned from experts. In December 2019, the EU’s executive body acknowledged it had sent questionnaires to both Google and Facebook as part of a preliminary investigation into their data-related practices.

This new questionnaire “covers the entire adtech value chain,” according to a lawyer who agreed to talk on condition of anonymity as he is involved in cases against the tech giant. He said this focus was new and echoed worries the U.K. and U.S. competition authorities are investigating.

Questions include the impact on customers and competitors of some of the company’s product changes. For example, the document asks whether companies have opted out of Google Display Network, the network of publishers that agreed to show Google ads, after it made it a default setting in 2018. The Commission also asks whether companies see search advertising and display advertising as substitutes for each other, or working in parallel. 

The Commission is also looking into whether Facebook and YouTube, which is owned by Google, can be seen as competitors, and into Google’s future plans to phase out third-party cookies on the Chrome browser. The U.K.’s Competition and Markets Authority announced it was probing Google’s proposals to remove third-party cookies on January 8.

The deadline to reply is January 22. 

Google had no comment on the cases. The European Commission could not immediately respond to a request for comment. 

Source: POLITICO https://www.politico.eu/article/brussels-zeroes-in-on-googles-data/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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