eu is now investigating google’s adtech over antitrust concerns

EU Launches Formal Antitrust Investigation into Google’s Adtech Practices

European Union competition authorities have initiated a comprehensive investigation into Google’s adtech stack and its influence within the online advertising ecosystem. This confirms the opening of a formal inquiry into the tech giant’s operations.

Previous EU Antitrust Actions Against Google

Over the past five years, Google has faced three significant EU antitrust enforcements concerning Google Shopping (2017), Android (2018), and AdSense (2019). However, the European Commission had previously refrained from officially investigating its broader role within the adtech supply chain.

The Commission clarifies that the current investigation builds upon the 2019 AdSense inquiry, rather than originating from a new complaint.

Scope of the New Investigation

The Commission’s investigation will determine whether Google has breached EU competition regulations by prioritizing its own online display advertising technologies within the adtech supply chain. This could be to the disadvantage of competing adtech providers, advertisers, and online publishers.

EU display advertising expenditure in 2019 was approximately €20 billion, according to the Commission’s estimates.

Data Access and Competition Concerns

The investigation will specifically examine whether Google is hindering competition by limiting third-party access to user data for advertising purposes on websites and applications. Simultaneously, it will assess whether Google reserves this data exclusively for its own use.

France’s Fine and Potential Settlement

Earlier this month, France’s competition authority imposed a $268 million fine on Google for self-preferencing within the adtech market. This was deemed an abuse of its dominant position in ad servers for publishers and mobile apps.

Google attempted a settlement, proposing interoperability agreements that the watchdog accepted. It remains uncertain whether Google will pursue a similar resolution at the EU level.

Data Protection Considerations

The Commission’s press release emphasizes the importance of EU data protection rules and the need to safeguard user privacy. This is a noteworthy inclusion.

Some critics have argued that France’s adtech settlement risks solidifying abusive practices related to user privacy in the pursuit of rebalancing the online advertising market.

The Importance of Holistic Regulation

As Cory Doctorow points out, the goal should not be competition in practices that harm the public. Effective antitrust enforcement requires collaboration between competition and privacy regulators.

Without this synergy, antitrust actions against Big Tech could inadvertently exacerbate user-hostile privacy abuses that dominant platforms have exploited due to their market power.

Therefore, poorly conceived antitrust enforcement could actually further diminish the rights of web users – a detrimental outcome, unless it benefits Google by allowing it to play regulators against each other.

The Need for Regulatory Collaboration

The debate surrounding the need for collaboration between competition and privacy regulators is gaining momentum in Europe. Regulators in Germany and the UK are leading the way in this regard.

The UK’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO) have jointly stated their belief that antitrust and data protection regulators must work together to foster a thriving digital economy that benefits both competitors and consumers.

The Privacy Sandbox and Regulatory Oversight

The CMA’s proposed settlement regarding Google’s ‘Privacy Sandbox’ – a replacement for tracking cookies – incorporates privacy commitments and data protection oversight by the ICO, alongside the CMA’s competition enforcement role.

The European Commission has been slower to recognize the need for this integrated regulatory approach. For example, it approved Google’s acquisition of Fitbit with only minor concessions, despite concerns about data advantages.

A Shift in Tone from the European Commission

The Commission’s current press release signals an awareness of the problem of regulatory silos, representing a potential shift in tone. Whether this will lead to the kind of collaborative regulatory approach needed to address surveillance capitalism remains to be seen.

Specific Areas of Investigation

The Commission will specifically examine the following:

• The requirement to use Google’s Display & Video 360 (‘DV360’) and/or Google Ads to purchase online display advertisements on YouTube.
• The obligation to use Google Ad Manager to serve online display advertisements on YouTube, and potential restrictions on competing services.
• The apparent favouring of Google’s ad exchange “AdX” by DV360 and/or Google Ads, and vice versa.
• Restrictions on third-party access to user data available to Google’s advertising services, including the Doubleclick ID.
• Google’s plans to prohibit third-party cookies on Chrome and replace them with the “Privacy Sandbox”.
• Google’s plans to limit the availability of the advertising identifier on Android devices for users who opt out of personalized advertising.

The Commission is mirroring the CMA’s scrutiny of Google’s proposed replacement for tracking cookies (Privacy Sandbox) and its existing adtech operations.

Statements from Key Figures

Margrethe Vestager, Commission EVP and competition chief, stated her commitment to ensuring fair competition in the digital advertising market.

A Google spokesperson provided a statement, asserting that the company builds technologies to be interoperable with numerous rival platforms.

Google also claims that publishers retain approximately 70% of the revenue generated through its products, and in some cases, even more.