EU Moves To Break Up Google’s Ad Tech Business

(Photo Credit: Pawel Czerwinski/Unsplash)

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If there’s one thing that gets under Google’s skin more than ChatGPT, it’s… well nothing does, really. But EU antitrust hawk Margrethe Vestager would probably be a close second.

On Wednesday, the European Commission said it has “concerns” that Google has abused its market dominance in the ad tech industry — echoing an accusation leveled against the tech giant by the US DOJ in January. In the past, EU concerns about Google’s dominion in various sectors have translated to multi-billion dollar fines. This time around, if Google’s conduct is found to be illegal the EU is making noises about forcing the Silicon Valley giant to spin off part of its business.

Here We Go Again

In 2017, Commissioner Vestager fined Google €2.4 billion for giving its shopping service a leg-up over rivals. Google appealed the decision but ultimately lost in 2021. Then, in 2018, Vestager slapped Google with a €4.3 billion fine for antitrust abuses related to its Android operating system. Again, Google tried to appeal but without success.

Google’s ads business, which generated $69.7 billion in revenue in Q2, is her biggest target yet. In a statement released on Wednesday, Vestager said that essentially Google controls too many links in the digital ad supply chain:

  • At the beginning of the chain, you have Google’s services for advertisers (called Google Ads and DV 360) which help advertisers get ad placement. At the end of the chain is Google’s service for publishers (called DFP), which helps publishers fill up their sidebars for ads for that vacuum cleaner you already bought two weeks ago.
  • Then in the middle of the chain is Google’s ad exchange, AdX. Ad exchanges are where algorithmically-powered auctions for digital ad space are held.

Vestager believes Google has run afoul of EU laws by using its market position on the buying and selling ends of the chain to give AdX a boost over rival ad exchanges, something which Vestager says has allowed AdX to keep its exchange fees relatively high.

Bardcore Legislation: Google may also have to keep a close eye on European courts over the next few months, as the EU voted in favor of a new AI Act on Wednesday. The act introduces some rules around generative AI, the buzzy tech that companies including Google are pushing forward as fast as they can, but it also regulates forms of AI which are less prominent in the current hype-cycle — including a ban on police using live facial recognition.