European Union regulators fined Google $3.5 billion (€2.95 billion) for breaching competition rules by favoring its own digital advertising services.
“When
markets fail, public institutions must act to prevent dominant players from abusing their power,” EU antitrust commissioner Teresa Ribera wrote in a statement. “True freedom
means a level playing field, where everyone competes on equal terms and citizens have a genuine right to choose.”
The EU said Google had abused its dominance by giving its own ad exchanges a competitive advantage over rivals and that it
must bring the practices to an end.
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In the fourth antitrust penalty for the company, the EU also ordered Google to end its “self-preferencing practices” and
take steps to stop “conflicts of interest” along the advertising technology supply chain.
“The European Commission's decision about our ad tech services is wrong and we will appeal," Lee-Anne Mulholland, vice president, global head of regulatory affairs, Google, wrote in a statement. "It imposes an
unjustified fine and requires changes that will hurt thousands of European businesses by making it harder for them to make money. There’s nothing anticompetitive in providing services for ad
buyers and sellers, and there are more alternatives to our services than ever before.”
The commission found that Google between 2014 and today, Google abused such its position,
breaching Article 102 of the Treaty on the Functioning of the European Union by "favouring its own ad exchange AdX in the ad selection process run by its dominant publisher ad server DFP by, for
example, informing AdX in advance of the value of the best bid from competitors which it had to beat to win the auction."
It also found that Google favored its ad exchange, AdX -- as shown in
the way its ad-buying tools Google Ads and DV360 place bids on ad exchanges. It gave this example: Google Ads was avoiding competing ad exchanges and mainly placing bids on AdX, thus making it the
most attractive ad exchange.
Timothy Cowen, co-founder of Movement for an Open Web, the lead complainant in this case, called the fine a "magnificent decision."
"It’s
great to see that the European Commission is standing up for consumers, and for fairness," Cowen wrote in a statement emailed to MediaPost."This should be seen as a signal that the EU will not be
intimidated and understands that the rule of law is important.”
Google is expected to generate $205 billion in digital ad revenue in 2025 worldwide. About $171.72 billion will come from Google’s global search advertising business, with
the remainder from display ads, according to Emarketer.
"Google can afford the fines," Emarketer wrote in a statement. "What it can’t afford is the
mounting drumbeat of cases, from Brussels to Washington, all circling the same idea—that breaking up Big Tech’s ad empire may be the only remedy regulators consider credible."