The European Commission opened a formal antitrust investigation on Tuesday into whether Google has abused its market position by favoring its own online display advertising technology.
Why it matters: The probe will target parts of Google's massive $147 billion annual ads business that have never been investigated formally by regulators, including ways its advertising practices may have shaped its dominance on its video platform YouTube.
Details: The probe broadly targets Google's dominance in advertising technology, which the Commission says could be "to the detriment of competing providers of advertising technology services, advertisers and online publishers."
- The investigation will look at whether Google is making it impossible for its competitors to compete with it in ad-serving by restricting third parties from gaining access to the user data it has on different websites and apps.
Be smart: Google over the past two decades has acquired a handful of advertising technologies, like DoubleClick, an ad tech platform that it purchased in 2007, that regulators have long-argued give it dominance in advertising.
- Google is by far the largest advertising company in the world, netting nearly $147 billion each year in advertising. Its closest competitor, Facebook makes around $83 billion.
What they're saying: "Online advertising services are at the heart of how Google and publishers monetize their online services,” said Margrethe Vestager, the EU’s antitrust chief. “We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.”
The big picture: This is the third major investigation into Google's dominance by the European Commission in less than five years.
- In 2017, the Commission fined $2.7 billion over abuse of its power in shopping.
- In 2018, the Commission fined Google $5 billion for abuse of its power over Android
- In 2019, the Commission fined Google $1.7 billion over abuse of its power in advertising.
What to watch: Regulators in the U.S. have been simultaneously probing Google for its dominance in ad tech. The U.S. has to-date failed to target Google with fines as severe as those levied on the tech giant by European regulators.