Google has received a fine of EUR 2.95 billion from the European Union for abusing its dominant position in the market online display advertising technology. The European Commission has given the company 60 days to end the offences and indicated it sees the best solution as Google divesting some of its adtech business.
The fine is based on the anticompetitive practices by Google going back to 2014 and is one of the largest ever inflicted by EU competition authorities. It comes just ahead of a trial starting later this month in the US to consider remedies in a similar case bought by the Department of Justice over Google's dominance in the so-called adtech stack.
Conflicts of interest
With operations on both the sell and buy sides of the display advertising market, as well the largest ad exchange, Google has an inherent conflict of interest that ends up favouring its own business to the detriment of competing ad exchanges, the European Commission said in an initial statement of its objections sent to Google in 2023. Notably its ad server DFP informs Google's ad exchange AdX in advance of the best bid from competitors for ad space, helping AdX to win the auctions. Its ad-buying tools Google Ads and DV360 also tend to favour AdX, further reinforcing the exchange's dominant position. The result is other ad exchanges find it difficult to compete and AdX is able to maintain high prices for its services.
In addition to the fine, Google was ordered to end these self-preferencing practices. It has 60 days to propose a solution, after which the Commission will asses the proposal and either accept Google's remedy or impose its own. The Commission has already signalled its preliminary view that only the divestment by Google of part of its services would address the inherent conflicts of interest, but said it first wants to hear Google's proposal.
Google said that it would appeal the EU decision and fine. "There’s nothing anticompetitive in providing services for ad buyers and sellers, and there are more alternatives to our services than ever before," said Lee-Anne Mulholland, Google’s global head of regulatory affairs.
