European Union antitrust regulators may soon demand that Google sell a portion of its advertising technology business. This move, reported by Reuters, is expected to be initiated by the European Commission, the top antitrust watchdog in the EU, potentially as early as Wednesday. The action is part of ongoing efforts to curb the digital ad giant’s dominant position in the market, intensifying trans-Atlantic endeavors.
The European Commission initiated an investigation in 2022 to scrutinize Google’s extensive presence across various levels of the online display advertising supply chain. The Commission expressed concerns about the company’s overwhelming market position, which triggered the probe. While break-up orders from the EU competition enforcer are infrequent, frustration has grown due to Google’s failure to address competition concerns, as stated by the source.
Research firm Insider Intelligence reveals that Google currently holds a substantial 28% market share of global ad revenue, making it the most dominant digital advertising platform worldwide. Although Alphabet, Google’s parent company, experienced a decline in first-quarter ad sales to $54.55 billion compared to the previous year, the figures surpassed analysts’ expectations. During the same period, the total revenue for Alphabet amounted to $69.79 billion.
Over the past few years, Google’s dominance in online advertising has faced increasing scrutiny. Rivals have lodged complaints about its alleged anti-competitive practices, resulting in antitrust investigations across multiple continents. In the United States, a lawsuit was launched earlier this year against Google in the ad tech sector, demanding the divestment of its ad manager suite. The lawsuit claimed that the tech giant had illegally abused its dominant position in online advertising. Google, however, has denied any wrongdoing in response to these allegations.
The Wall Street Journal was the first to report on the EU’s potential action, signaling a further development in the ongoing regulatory scrutiny faced by Google in relation to its ad-tech business.
