Google to get hit with EU antitrust charges for ad tech abuses

Google is set to be hit with a formal antitrust complaint from the European Union that could lead to massive new fines and strike at the heart of the advertising technology that drives most of the US firm’s revenue.

The so-called statement of objections, to be announced as soon as June 14, will mark another escalation in a long-running saga that’s already led to a trio of EU penalties totalling more than €8 billion ($8.6 billion), Bloomberg reports.

The new charges will target the core of the Alphabet Inc. unit’s ad tech business model, according to people familiar with the matter who spoke on condition of anonymity. Google’s advertising business is by far its most successful, accounting for about 80 per cent of its annual revenue. In 2022, its ad sales amounted to about $225 billion. 

The new complaint is the most significant in the current five-year mandate of the European Commission, the EU’s antitrust watchdog, one of the people said.

Under EU rules, fines for antitrust violations can reach as much as 10 per cent of global sales — though penalties seldom approach that level and companies have the right to defend themselves before and after fines are levied.

Google didn’t immediately respond to a request for comment. The commission in Brussels declined to comment.

Google has long held a key position in which it’s able to collect data allowing advertisers to target ads, as well as sell ad space and provide the technology that allows for advertisers to find publishers to sell their space. 

The EU first opened a probe into Google’s ad tech practices in 2021. The commission’s investigation has been examining how the company may have obstructed rivals’ access to user-data for online advertising as well as how it may have ring-fenced data for its own use. 

Google’s agreement with Meta Platforms Inc. as part of the Open Bidding program had originally been part of the probe, but was ditched in late 2022. In September 2022, the investigation was broadened after the Portuguese competition authority submitted new evidence. 

The UK’s competition authority has also been probing Google’s ad-tech practices and litigation against the firm’s behaviour is ongoing in the US.

At the same time, Google is continuing to fight its EU antitrust fines in the courts, including a landmark €4.34 billion penalty for how it runs its Android mobile operating system. 

EU judges trimmed that penalty to €4.125 billion last year, but Google is challenging the case at the bloc’s highest court.