The European Commission is formally suing Google for abuse of power in its advertising business. Behind the scenes, the company is favoring its own services and may have to fork out part of its ad network. On Wednesday afternoon, European Commissioner Margrethe Vestager (Competition) explained the decision during a press conference in Brussels.
Google controls most of the online advertising value chain. It collects information about users’ interests through the search engine, map services and YouTube, Chrome web browser and Android operating system. The advertising technology that Google provides is not visible to the user: a combination of services with which online publishers offer advertising space, advertisers can buy that space and an auction that links advertisers to individual users.
The preliminary investigation by the European Commission has shown that Google is bending the automated auctions of online advertisements to its own advantage over competitors.
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In the United States, Google is the target of similar charges by the US Department of Justice and a group of US states led by Texas. Vestager’s team worked closely with the US Department of Justice during the preliminary investigation, said the European Commissioner.
Google is the largest advertising seller in the world; the turnover of Google’s parent company Alphabet in 2022 was more than $ 282 billion, largely earned from online advertisements.
Google has a long history of competition cases in Brussels. The company was fined more than 8 billion euros: for abuse of power in price comparison service Shopping (2017, 2.4 billion), Android operating system (2018, 4.3 billion) and Adsense, an advertising network for companies that use the Google search bar on using their own site (2019, 1.49 billion).