Google hit with European Union antitrust probe on ad-tech dominance
Google faces a
sweeping European Union probe into its advertising
technology, a move that strikes at the heart of the tech giant’s business
model. The European Commission said Tuesday its new confrontation with the
Alphabet unit will focus on concerns the company may be illegally favouring its
own online display advertising technologies, squeezing out rivals.
“This is probably the probe that many people were waiting for
because it goes to the core of Google’s business,” said Aitor Ortiz, an analyst
for Bloomberg Intelligence. The biggest risk would be an order for Google to
separate from or restrict its online ads operations, which “could have a
significant impact on the money generated through online advertising,” he
added.
It’s the first time the EU has directly examined the black-box of
online advertising where Google automatically
calculates and offers ad space and prices to advertisers and publishers as a
user clicks on a web page. Earlier EU cases focused on shopping search ads,
mobile phone ads and advertising contracts. The investigation will also check
if Google unfairly blocks competitors’ access to user data and will scrutinize
privacy changes to phase out some cookies and data access for advertisers.
Harder
to compete
“We are concerned that Google has made it harder for rival online
advertising services to compete,” Margrethe Vestager, the EU’s antitrust commissioner,
said in the statement. “Online advertising services are at the heart of how
Google and publishers monetize their online services.”
The latest EU case has been brewing for months. Vestager signaled
in March the regulator was working on a “very large” probe into Google.
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