Google’s Online Advertisement Business Said to Face Its Biggest Regulatory Threat in EU by Year-End

Google has been fined more than EUR 8 billion in the last decade. Google made $147 billion in revenue from online ads last year. EU inquiry could end up targeting all of Google’s ad empire.

Alphabet unit Google could face its biggest regulatory threat. EU antitrust regulators to open a formal investigation into its profitable digital advertising business before the end of year.

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Google fined more than 8 billion euros

It would mark a new front by the EU competition enforcer against Google. It has in the last decade fined the company more than 8 billion euros ($9.8 billion) (roughly Rs. 72,661 crores) for blocking rivals in online shopping, Android smartphones and online advertising. An EU probe would focus on Google’s position vis-a-vis advertisers, publishers, intermediaries and opponents.

Google made $147 billion (roughly Rs. 10.8 lakh crores) in revenue from online ads last year, more than any other company in the world. Ads on its properties, including search, YouTube and Gmail, accounted for the bulk of sales and profits.

About 16 percent of revenue came from its display or network business. Other media companies use Google technology to sell ads on their website and apps.

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Both units are under fire. The US Justice Department, joined by some states, sued Google last year for abusing its dominance in search ads. A group of states led by Texas in a later lawsuit focussed on anti-competitive behaviour on the network.

France last week settled with Google for $268 million (roughly Rs. 1,987 crores) and various commitments over similar allegations related to the network business, and the unit also must work closely with Britain’s competition regulator on upcoming software changes as part of a settlement reached days later.

The Commission declined to comment. Google did not immediately respond to a request for comment.

A new EU query could end up targeting all of Google’s ad empire. Market researcher eMarketer expects Google to control 27 percent of global online ad spending this year, including 57 percent for search ads and 10 percent of display.

They say Google takes advantage of the dependence buyers, sellers and intermediaries have on it to extract high fees from all sides and block opponents from fairly competing with it.

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