Alphabet’s Google may need to sell a portion of its profitable adtech division in order to allay worries about anti-competitive behaviour, according to EU regulators.
Two years after starting an inquiry into actions like preferring its own advertising services, the European Commission laid out its complaints in a statement of objections to Google. If found guilty, this may result in a fine of up to 10% of Google’s annual global revenue.
Given that the adtech industry accounted for 79% of the company’s total revenue last year, the stakes are higher for Google in its most recent dispute with authorities.
It earned $224.5 billion in advertising revenue in 2022 from sources such search services, Gmail, Google Play, Google Maps, YouTube advertisements, Google Ad Manager, AdMob, and AdSense.
Google may need to sell a portion of its adtech business, according to EU antitrust commissioner Margrethe Vestager, because a behavioural remedy is unlikely to be successful in ending the anti-competitive practises.
“For instance, Google could divest its sell-side tools, DFP and AdX. By doing so, we would put an end to the conflicts of interest,” she said at a press conference.
“Of course I know this is a strong statement but it is a reflection of the nature of the markets, how they function and also why a behavioural commitment seemed to be out of the question.”
Google stated that it rejected the Commission’s accusation.
“The Commission’s investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC’s view,” Google’s vice-president of global ads, Dan Taylor, said in a statement.
According to research firm Insider Intelligence, Google has a 28% market share of all global ad revenues, making it the most important digital advertising platform in the world.