The European Commission has sent a Statement of Objections (SO) to Google over abusive practices in online advertising technology.
Uniquely it seems, the Commission has identified in the press release that to remedy the situation the Commission is of the preliminary view that divestment by Google is required.This would be the first example of a proposed break-up of a tech business by the EU under market dominance rules. It is noteworthy that in January the USA's Federal Trade Commission filed a suit before a court in which one relief sought is the divestiture of Google's Ad Manager suite.
The merit of the arguments in the SO and, indeed, divestment as a remedy can be debated. What seems unfair is that a divestment threat has been made, which is a serious matter that must have an effect on Google and its shareholders. An SO is a formal step in Commission investigations into suspected violations of EU antitrust rules, but the SO is not a public document, and sending a SO and opening of a formal antitrust investigation does not prejudge the outcome of the investigation and the final decision.
An intriguing question is why this case is moving in this direction given the near future application of The Digital Markets Act is expected to tackle the issues raised.
“Google has a very strong market position in the online advertising technology sector. It collects users’ data, it sells advertising space, and it acts as an online advertising intermediary. So Google is present at almost all levels of the so-called adtech supply chain. Our preliminary concern is that Google may have used its market position to favour its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs. If confirmed, Google’s practices would be illegal under our competition rules.
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