“If a company does not respect its obligations, if it does it again, then we may have to adopt a very strict approach and impose separation and dismantling”, affirmed the Vice-President of the European Commission in our pages at the end of April, even if Margrethe Vestager said she had “an obligation to use the least intrusive solution first”.
Faced with Google’s anti-competitive practices, the European Commission had tried the soft method in its previous decisions, confining itself to fines. On Wednesday, June 14, she moved up a gear, noting “preliminarily” that Google has “abused its dominant position” in the market for online advertising technologies, or “ad-tech”. Because this time, the European authority considers “that only the sale by Google of part of its services would make it possible to dismiss its concerns”.
Present “at all levels of the supply chain”
“The Commission criticizes Google for favoring its own online display advertising technology services to the detriment of competing advertising technology service providers, advertisers and online publishers,” the Commission said in a statement. communicated.
“We disagree with the European Commission’s view and will respond accordingly,” said Dan Taylor, vice president of global advertising for Google.
Divesting part of a company is a measure of last resort in cases involving competition law. But it must be said that Google’s presence “at all levels of the advertising technology supply chain” – in Margrethe Vestager’s own words – is unprecedented.
The Californian firm risks a financial penalty corresponding to 10% of its annual worldwide turnover. A sum that could amount to tens of billions of dollars.
$225 billion in advertising revenue in 2022
Advertising revenue generated by Google is the main source of income for its parent company Alphabet, accounting for $225 billion in 2022, or 80% of its annual revenue, details Bloomberg.
Google is remunerated in two ways via advertising: first, directly with those it sells on its own sites and applications, such as YouTube. The American giant also markets services through which it connects websites wishing to sell advertising space and advertisers who want to place their advertisements.
Google provides ad servers to manage its ad space on websites and apps, tools for advertisers to manage automated campaigns, and ad exchanges where both parties can bid for ad space.
repeat offender
This is the fourth major decision by the European Union concerning anticompetitive practices by Google between 2017 and 2019.
So far the Californian group had been fined more than 8 billion dollars in total: for having “systematically favored” its own price comparison service, abusing its privileged position on its Android mobile operating system by systematically linking its search engine and its Chrome applications, and finally, preventing its AdSense customers from accepting advertisements from rival search engines. Google is currently challenging all of these cases in court, reports The Verge.
This procedure was initiated in 2011. Google will have the opportunity to respond in writing and during a hearing to be held, after which the European Commission will issue its final decision.