EU set to confront Google’s most successful ads model

EU and google
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In a striking blow to US technology giant Google, the European Union (EU) is gearing up to deliver another substantial blow by lodging a formal antitrust complaint. According to Bloomberg, the charge sheet against Google is expected to be unveiled as early as Wednesday, potentially leading to additional fines imposed by the EU and the targeting of its highly successful ad tech model.

It is crucial to note that approximately 80 percent of Google’s total revenue stems from its advertising business. Hence, any EU regulations aimed at its ads model could significantly impact the company’s performance.

The EU’s watchdog is deploying its most robust action to date against Google, showcasing the severity of the measures taken. In 2021, the EU initiated an investigation into Google, primarily focusing on whether the company impeded rivals’ access to user data for online advertising and engaged in unfair ring-fencing practices regarding data usage.

Under EU regulations, antitrust fines can reach up to 10 percent of a company’s global sales. However, it is relatively uncommon for penalties to escalate to such levels, and companies are given the opportunity to defend themselves both before and after the imposition of fines.

Google has long maintained a dominant position in the industry, leveraging its market presence to collect data that fuels targeted advertising, facilitate ad space sales, and provide the technology connecting advertisers with publishers.

The troubles for Google extend beyond the EU, with the United Kingdom’s competition authority also scrutinizing the company’s ad tech practices. Meanwhile, ongoing legal proceedings are unfolding in the United States, challenging Google’s conduct.

Concurrently, Google is actively contesting antitrust fines imposed by the EU in court, including a landmark penalty of €4.34 billion for its management of the Android mobile operating system. Although EU judges reduced the fine to €4.125 billion last year, Google is presently challenging the case at the highest court within the EU.

The outcome of the EU’s investigation into Google’s ad tech practices carries far-reaching implications for the tech giant, potentially leading to substantial fines and regulatory actions that could reshape the industry landscape.

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