The European Commission said on Tuesday that its new confrontation with the Alphabet Inc. unit would focus on concerns that the company could illegally promote its own online display advertising technologies, thereby eliminating rivals.

“This is probably the survey that many people have been waiting for because it goes to the heart of Google’s business,” said Aitor Ortiz, analyst for Bloomberg Intelligence. The greatest risk would be an injunction on Google to separate or restrict its online advertising operations, which “could have a significant impact on the money generated from online advertising,” he added.

This is the first time that the EU directly examines the black box of online advertising where Google automatically calculates and offers advertising space and prices to advertisers and publishers when a user clicks on a web page. Previous EU cases have involved purchase search announcements, mobile phone announcements and advertising contracts.

Alphabet shares fell 0.3% as of 12:25 p.m. in New York. The company derives about 81% of its revenue from online advertising, which amounted to $ 147 billion last year.

Gradual deletion of cookies

The investigation will also verify whether Google is unfairly blocking competitors’ access to user data and will review privacy changes to phase out certain cookies and data access for advertisers. Regulators also want to examine YouTube’s strong position for online video and how Google can use it to help its advertising tools.

“We are concerned that Google has made it more difficult to compete between competing online advertising services,” said Margrethe Vestager, EU competition commissioner, in a statement. “Online advertising services are at the heart of how Google and publishers monetize their online services.”

The EU’s latest case had been brewing for months. Vestager reported in March that the regulator was working on a “very large” probe on Google.

Regulators in January gathered information on Google’s practices in the “ad technology value chain,” according to questionnaires sent to publishers and advertising agencies.

Online advertising is a new front for antitrust law enforcement. In France, Google agreed earlier this month to pay a fine and make global changes to ad sales. The UK watchdog could oversee Google’s ad tracking overhaul under the concessions it is considering.

Google’s $ 147 billion cash cow finally comes under scrutiny: Alex Webb

Google said in an emailed statement that European businesses choose their services “because they are competitive and efficient.” The company “will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers”.

Guardians

The Google probe joins a series of global regulatory actions aimed at dominating a handful of tech giants. Surveys often focus on how they can use access to data and platforms to suppress competition.

Several US states and the Department of Justice have sued tech companies over the past year over antitrust issues. The EU has stepped up investigations into Amazon.com Inc. and Apple Inc., and earlier this month announced an investigation into Facebook Inc. The UK is also examining Facebook and wrenched commitments from Google over its use of Cookies.

At the same time, the EU authority is trying to gain new powers to investigate the so-called internet gatekeepers and ban them from promoting their own products. Rules could be finalized early next year, a German lawmaker working on the report said on Monday.

Spending on digital advertising was around € 20 billion ($ 24 billion) in the EU in 2019, the regulator said. EU fines are based on the value of sales and capped at 10% of annual income. Google has already been fined more than $ 9 billion by the EU.

Click here to learn more about the EU’s concerns.

Opening an investigation increases the risk that the EU will slap the company with fines or order it to change its business model. But cases can take years to conclude and are sometimes dropped if regulators cannot substantiate their initial suspicions.

What Bloomberg Intelligence Says:

Google’s antitrust woes in Europe are not over, with new rules and investigations targeting the company’s dominance in the European and UK online search and advertising markets, but the risks are manageable, in our view. notice.

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Source: www.dailymaverick.co.za
This notice was published: 2021-06-23 03:37:46

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