Notification of review for violation of anti-monopoly law
Following the United States, the level of regulation is raised
“Abuse of digital advertising dominance
“Causing damage to competitors’ advertisers”
Google: “I do not agree with the survey results”
The European Union (EU) notified Google on the 14th (local time) that it had violated anti-monopoly laws in the digital advertising market by abusing its market dominance. Following the United States, even the EU has drawn its sword against Google’s ‘advertising business’. With this move, there is a greater possibility that Google will separate its advertising business division.
On this day, the European Commission issued a review report containing this content to Google. The review report is a type of document that alleges violation of competition laws against the company, and the company must usually respond within 10 weeks. Afterwards, if the EU Commission determines that a violation has occurred, it can impose a fine or issue an order prohibiting the action.
EU Competition Commissioner Margrethe Vestager said, “Google is favoring its own online display advertising technology, which is damaging to competitors, advertisers and online publishers.” At the same time, he said, “It is possible that it will lead to increased costs not only for competitors but also for advertisers,” and “if ultimately confirmed (through further investigation), this practice will be illegal.”
In particular, the European Commission raised the possibility of ordering the sale of the advertising division. “The Commission’s preliminary view is that competition concerns can only be addressed if Google is required to divest some of its services,” Vestager said. However, he added, “It is very rare to request a sale, and we have not yet made a formal request to Google.”
Regarding this, the Associated Press reported, “This is the first time that the EU has mentioned the sale of a major part of the business in violation of anti-trust laws.” Google currently △ relays advertising space online △ operates an online advertising auction house where various media can buy and sell advertisements △ and △ supplies various technical service tools for this purpose.
The European Commission judged that Google was using this all-encompassing control over the ecosystem to give its online advertising store, Ad Exchange (AdX), an advantage. Specifically, the basis for this was the act of informing AdX in advance of the bidding price proposed by competitors during the advertising bidding process conducted through DFP, Google's advertising server. Google has an absolute position in the world. According to Insider Intelligence, Google's share of the U.S. digital advertising market amounts to 28.8%.
However, in response to today's announcement, Google countered, saying, "We do not agree with the results of the EU Commission's investigation and will respond," adding, "The EU's investigation focused on a narrow part of the advertising business." “Our ad technology tools help businesses of all sizes effectively reach new customers,” Google said. “We are committed to creating value for our publisher and advertiser partners in this highly competitive space.” claimed.
The pressure surrounding Google's digital advertising business is global. In January of this year, the U.S. Department of Justice and eight state governments also filed an antitrust lawsuit against Google. The U.S. Department of Justice also took issue with Google Ad Exchange (AdX). At the time, the Justice Department said of Ad Exchange, “It is the same as if Goldman Sachs or Citibank owned the U.S. stock exchange,” and asked the court to “dismantle the advertising business of this big tech company.” Currently, the UK is also pursuing an investigation of a similar nature.
Due to such global pressure, Google believes that it should avoid selling. Previously, Google's parent company, Alphabet, reportedly delivered a letter to the U.S. Department of Justice stating that it would spin off its advertising business division into a separate subsidiary. Citing a source, the Wall Street Journal explained, “Alphabet plans to implement this plan if the Justice Department promises not to file antitrust violation lawsuits.” However, the Justice Department rejected Google's proposal and filed a lawsuit.
Government regulations on big tech companies are becoming stronger. The Japanese government is preparing regulatory measures to ban Apple and Google from monopolizing the App Store.