According to a source familiar with the matter, European Union antitrust regulators may compel Google to divest a portion of its advertising-technology business. The European Commission, the top antitrust authority in the EU, is expected to lodge a formal complaint against Google, potentially as early as Wednesday, as part of ongoing efforts to reduce the tech giant’s dominance in the digital advertising realm.
In 2022, the European Commission initiated an investigation into Google’s extensive presence across various levels of the online display advertising supply chain, expressing concerns about its overwhelming market position. It is relatively rare for the EU competition enforcer to issue breakup orders, but frustration has mounted due to Google’s failure to address competition issues, according to the source. Neither the Commission nor Google immediately responded to Reuters’ requests for comment.
As per research firm Insider Intelligence, Google holds a 28% market share of global ad revenue, making it the most dominant digital advertising platform worldwide. While Alphabet, Google’s parent company, reported a year-on-year decline in first-quarter ad sales to $54.55 billion, it exceeded analysts’ expectations. Alphabet’s total revenue for the same period reached $69.79 billion.
Google’s dominance in online advertising has faced increasing scrutiny in recent years. Complaints from competitors regarding alleged anti-competitive practices have led to antitrust investigations spanning multiple continents. Earlier this year, the United States initiated an ad tech lawsuit against Google, demanding the divestiture of its ad manager suite, and claiming that the search giant had unlawfully exploited its online advertising dominance. Google has denied any wrongdoing.
The Wall Street Journal initially reported the EU’s potential action.
