EU watchdog orders Google to break up digital ad business over competition fears

European Union regulators have ordered technology giant Google to sell off some of its lucrative digital advertising business in order to address competition concerns.

The European Commission, the bloc’s executive branch and top competition enforcer, said its preliminary view after an investigation is that “only the mandatory divestment by Google of part of its services” will satisfy its concerns.

The 27-nation EU has led the global movement to crack down on big tech companies but it has previously relied on issuing blockbuster fines, including three penalties for Google worth billion of euros.

It is the first time the bloc has ordered a tech giant to split up key parts of its business.

Google can now defend itself by making its case before the commission issues its final decision.

The company did not immediately respond to a request for comment.

The commission’s decision stems from a formal investigation that it opened in June 2021, looking into whether Google violated the bloc’s competition rules by favouring its own online display advertising technology services at the expense of rival publishers, advertisers and advertising technology services.

YouTube was one focus of the commission’s investigation, which looked into whether Google was using the video-sharing site’s dominant position to favour its own ad-buying services by imposing restrictions on rivals.

Google’s ad tech business is also under investigation by Britain’s competition watchdog and faces litigation in the US.

Brussels has previously hit Google with more than 8 billion euros (£6.9 billion) worth of fines in three separate competition cases, involving its Android mobile operating system and shopping and search advertising services.

The company is appealing against all three penalties.

An EU court last year slightly reduced the Android penalty to 4.125 million euros (£3.539 million).

EU regulators have the power to impose penalties worth up to 10% of a company’s annual revenue.

Published: 14/06/2023 by Radio NewsHub