Exclusive: Google's adtech business set to face formal EU probe by
year-end - sources
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 [June 19, 2021] By
Foo Yun Chee
BRUSSELS (Reuters) - Alphabet unit Google
could face its biggest regulatory threat, with EU antitrust regulators
set to open a formal investigation into its lucrative digital
advertising business before the end of the year, said people familiar
with the matter.
It would mark a new front by the EU competition enforcer against Google.
It has in the last decade fined the company more than 8 billion euros
($9.8 billion) for blocking rivals in online shopping, Android
smartphones and online advertising.
An EU probe would focus on Google's position vis-a-vis advertisers,
publishers, intermediaries and rivals, one of the people said,
indicating deeper scrutiny than the French antitrust agency's case
concluded last week.
Google made $147 billion in revenue from online ads last year, more than
any other company in the world. Ads on its properties, including search,
YouTube and Gmail, accounted for the bulk of sales and profits.
About 16% of revenue came from its display or network business, in which
other media companies use Google technology to sell ads on their website
and apps.
Both units are under fire. The U.S. Justice Department, joined by some
states, sued Google last year for abusing its dominance in search ads. A
group of states led by Texas in a later lawsuit focused on
anti-competitive behaviour on the network side of the house.
France last week settled with Google for $268 million and various
commitments over similar allegations related to the network business,
and the unit also must work closely with Britain's competition regulator
on upcoming software changes as part of a settlement reached days later.
The Commission declined to comment. Google did not immediately respond
to a request for comment.
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A sign is seen at the entrance to the Google retail store in the
Chelsea neighborhood of New York City, U.S., June 17, 2021.
REUTERS/Shannon Stapleton
A new EU inquiry could end up targeting all of Google's ad empire. Market
researcher eMarketer expects Google to control 27% of global online ad spending
this year, including 57% for search ads and 10% of display.
While the numbers may not look monopolistic at first blush, advertisers and
rivals contend that Google's various software play a role in so many facets of
the market that the company is impossible to avoid.
They say Google takes advantage of the dependence buyers, sellers and
intermediaries have on it to extract high fees from all sides and block rivals
from fairly competing with it.
In a questionnaire sent to Google rivals and third parties earlier this year and
seen by Reuters, the EU watchdog asked if advertisers receive rebates when they
use Google intermediaries which allow advertisers or media agencies to buy
advertising inventory from many sources.
The Commission should conclude ongoing cases before starting new ones, said
Thomas Hoppner, a partner at law firm Hausfeld, and who advises several
complainants against Google.
"From the practitioner's point of view and from the industry's point of view, it
appears equally important to bring investigations into local search and Google's
job search to an end when other authorities have opened investigations into
Google's adtech," he said.
($1 = 0.8399 euros)
(Reporting by Foo Yun Chee, additional reporting by Paresh Dave in San
Francisco; editing by David Evans, Chizu Nomiyama and Louise Heavens)
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