Why Google is facing an antitrust fine in the EU
What's the story
Google is set to be hit with a modest antitrust fine by the European Union (EU) in the coming weeks. The penalty comes after a four-year-long investigation into alleged anti-competitive practices in its adtech business. The probe was initiated by a complaint from the European Publishers Council, which accused Google of favoring its own advertising services over competitors.
Shift in strategy
Shift in EU's approach to Big Tech penalties
The upcoming fine represents a departure from the previous EU antitrust chief Margrethe Vestager's strategy of imposing heavy deterrent penalties on Big Tech. Under her successor Teresa Ribera, the focus has shifted toward getting companies to stop anti-competitive practices rather than just punishing them. The EU competition enforcer has declined to comment on this matter.
Google's stance
Google's defense against adtech allegations
In response to the EU's investigation, Google referred to a 2023 blog post where it criticized what it called the Commission's flawed interpretation of the adtech sector. The tech giant claimed that both publishers and advertisers have plenty of options in this space.
Past penalties
Comparison with previous fines in the EU
The upcoming fine is unlikely to be as high as the record €4.3 billion penalty imposed on Google by the EU in 2018. That was for using its Android mobile operating system to stifle competition. The company was also fined €2.42 billion in 2017 for giving its own price comparison shopping service an unfair advantage over European rivals, and €1.49 billion in 2019 for abusing its dominance to prevent websites from using brokers other than its AdSense platform.
Revenue details
Google's advertising revenue and potential divestment concerns
Last year, Google's advertising revenue from search services, Gmail, Google Play, Google Maps, YouTube, AdMob, AdSense, and Google Ad Manager, reached $264.6 billion or 75.6% of its total revenue. However, the company does not disclose specific figures for its adtech business related to ads on other websites as well as not search ads. Despite the ongoing investigation into anti-competitive practices in this sector, Ribera is not expected to order Google to sell part of its adtech business.