Google has vowed to fight the EU’s threat to break up its ad business, setting the scene for an antitrust battle that could eventually rival its ongoing clash with the US justice department and state attorneys-general.
In a recent letter to EU watchdogs, Google warned it won’t accept attempts to force the company to sell its advertising technology arm, deemed by Margrethe Vestager, the bloc’s currently-on-leave antitrust chief, as the only viable way to restore competition.
Google is set to formally oppose the EU’s June statement of objections before the end of the year, said a person familiar with the content of the letter, who spoke on condition of anonymity.
Such a move could kick-start years of more legal wrangling with EU regulators who accused Google of favouring its own ad exchange programme over rivals, bolstering the company’s central role in the ad-tech supply chain.
In June, the EU said that it was concerned that Google’s allegedly intentional conduct in the ad-tech supply chain gives its own exchange — AdX — a competitive advantage that may have foreclosed rival ad exchanges, to the detriment of fair competition.
The EU case is a direct attack on 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.
The European Commission didn’t immediately respond to a request for comment. A Google spokesman didn’t comment beyond referring to a previous blog post in which the company said that the EU’s complaint doesn’t “recognise how advanced advertising technology helps merchants reach customers and grow their businesses”.
Since the EU’s complaint, Vestager has taken temporary leave from the Brussels-based commission in order to pursue the role of president of the European Investment Bank.
A statement of objections sets out the EU’s findings and is usually — though not always — a precursor for fines or orders for companies to change their business practices. Firms on the receiving end can contest the filings in writing or at oral hearings. When the EU makes a final decision, companies can then sue the regulator.
Google has been in the EU’s cross-hairs for years. Vestager’s team has fined Google €8.3-billion in total, including for abuses of its dominance on its mobile operating system and its display advertising operations, all of which the company is appealing.
But the EU’s biggest and most recent case has been overshadowed by events in the US, where Google is being sued by the justice department and state attorneys-general in a case that could also result in the break-up of the 25-year-old company.
The US showdown focuses on agreements between the tech giant and other companies to make Google’s search engine the preselected option, or default, in browsers and mobile devices. — Samuel Stolton, with Stephanie Bodoni, (c) 2023 Bloomberg LP