Google hit with European Union antitrust probe on ad-tech dominance

Firm may be illegally favouring its own online display ad tech, says bloc

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.