Google Faces Investigation From The EU For Domination In The Digital Advertising Business

Google is facing accusations of monopolizing digital advertising. (photo:ary julanto/voi)

JAKARTA - Google could face antitrust allegations by the EU next year over its digital advertising business. According to several sources, on Thursday 13 October, these allegations put Alphabet's subsidiary at the risk of a fourth fine from the EU of more than a billion euros.

Google's advertising business, which generated sales of more than $100 billion last year, is Alphabet's biggest money maker. They account for about 80% of annual revenue, despite efforts over the past decade to drive sales of hardware, subscription services, and cloud computing technology.

The European Commission launched an investigation into Google's adtech business in June last year. They suspect that the US tech giant may benefit unfairly from rivals and advertisers.

According to sources, Google, which risked a fine of four billion euros, then attempted to resolve the case but was a small and very early concession. Google has also raised more than 8 billion euros in EU antitrust fines in the last decade.

EU competition enforcers are likely to issue an indictment early next year although the time may still change.

The EU anti-competition commission has also asked third parties to remove classified details in their posts, usually a precursor to allow Google to access documents after receiving objection statements.

Google can avoid accusations by offering more concessions to complete the investigation. Some companies prefer to look at the appropriate regulatory issues before proposing an adapted solution.

The EU Commission itself declined to comment on the report. Meanwhile, Google, as the world's leading online ad seller, is even far ahead of Meta Platforms Inc's Facebook and Instagram, did not immediately comment on the report.

"This case is at the heart of Google's ad-based business model, which affects advertisers, publishers, ad technology providers, and users",ORDINA said Paemen, partner at law firm Clifford Chance, told Reuters. Paemen has previously advised Google rivals in another case.

"It has long emerged that advertisers and publishers have been lifting arms about Google's advertising technology behavior over the years. Google operates on many sides of advertising transactions and gives publishers and advertisers raw deals," he said.

Google's dominance in online advertising has been increasingly being questioned over the past few years. Complaints from competitors about anti-competitive practices alleged to have led to antitrust investigations on five continents regarding the practice.

Google's advertising business generated sales of nearly 111 billion US dollars during the first half of this year. Analysts expect Google to make $233 billion in advertising sales this year, up about 11% from last year, according to Refinitiv estimates.

Google's advertising business covers a lot of parts, but search ads lead in terms of revenue. Other aspects include selling ads on outdoor partner websites and apps and selling ads on YouTube, Gmail, and other internal services.