Google‘s legal battles with global regulators are nothing new. However, a recent decision from the European Union marks a significant moment in the ongoing struggle over digital advertising. On Friday, the European Commission, the EU’s top antitrust enforcer, issued a €2.95 billion ($3.5 billion) fine against the tech giant. This penalty—the fourth such antitrust fine from the EU—was levied for what the Commission calls Google’s “abusing its dominant position” in the online adtech market since 2014.
A $3.5 billion fine is the EU’s next move to regulate Google’s AdTech business
The EU’s investigation found that Google engaged in what it calls “self-preferencing practices.” The firm allegedly used its platforms to favor its own services over those of its competitors. The Commission alleges that Google’s illegal behavior has created higher costs for advertisers and publishers. In turn, this could have led to higher prices for consumers. For publishers—many of whom rely on online display ads, the banners and text that appear on websites—the abuse meant lower revenue, which could jeopardize their business models.
As expected, Google has pushed back. In a statement, the company’s global head of regulatory affairs, Lee-Anne Mulholland, called the decision “wrong” and said it would “hurt thousands of European businesses by making it harder for them to make money.” She also argued that “there are more alternatives to our services than ever before” and that Google is simply providing services for ad buyers and sellers. The company has vowed to appeal the fine.
Google to appeal
So, what happens now? The EU has given Google 60 days to propose a plan to fix its business practices. The Commission has warned that if a “viable plan” is not submitted, it will not hesitate to impose a more drastic “structural remedy”—a strong hint at forcing Google to sell off parts of its ad tech business. The Commission’s Teresa Ribera stated that past fines have not worked. So, this time, a breakup may be the only effective solution.
While this latest fine is a huge sum, it’s worth noting that it is still “pocket change” for Google. The Mountain View giant earned over $28 billion in a single quarter. Critics, including one from the Future of Technology Institute, argue that a fine alone won’t change the company’s behavior and that “only a break-up will fix Google’s monopoly.”
The case is also not isolated. Google is facing similar antitrust challenges from the US Department of Justice as well as authorities in Canada and Britain, making this a truly global issue. The pressure on Google’s ad tech business is reaching a new level of intensity. Regulators appear increasingly serious about taking action.
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