In the cartel dispute with Google, the EU is threatening its toughest sanction to date. The Commission signaled for the first time today that it could oblige the tech giant to sell part of its business.
Internet giant Google may have to sell part of its online advertising business by order of the European Union because of anti-competitive behavior. A self-commitment will probably not be enough to end the current practice, said Margarethe Vestager, the EU Commissioner responsible for fair competition. “Of course I know this is a strong claim, but it reflects the nature of markets and how they work.”
Own technology preferred
After an investigation, the European Commission has come to the preliminary conclusion that only the mandatory sale of part of Google’s services can eliminate concerns about competition, the authority announced today. The main question in the proceedings is whether Google has gained an advantage over its rivals in advertising services and has thereby distorted competition.
In a two-year investigation, the EU supervisors found that the Alphabet subsidiary was hindering competition by preferring its own technology for online advertising. Google has been doing this since 2014.
“The company collects user data, sells advertising space and acts as an intermediary for online advertising,” says Vestager. So Google is represented at almost every level in this industry. “We fear that Google could have used its market position to favor its own brokerage services,” said the politician.
three-digit billions in proceeds through ads
It’s the first time the EU has ordered a tech giant to split up parts of its business. Google can now present its arguments before the Commission makes its final decision. The company did not immediately respond to a request for comment.
Thanks in part to its strong position as a search engine operator, the US group can claim 28 percent of all income from Internet ads worldwide. Last year, those revenues added up to $224.5 billion.
The EU has spearheaded a global movement calling for a crackdown on tech giants. However, the European competition authorities have so far limited themselves to imposing drastic fines, including three multi-billion euro antitrust fines against Google.