According to a source familiar with the matter, European Union antitrust regulators are considering directing Google, a subsidiary of Alphabet Inc, to divest a portion of its advertising technology business. This development comes as the European Commission, the EU’s primary antitrust authority, prepares to potentially lodge a formal complaint against Google in an effort to curb the tech giant’s dominant position in the digital advertising industry.
In 2022, the Commission initiated an investigation into Google’s extensive presence throughout the online display advertising supply chain, expressing concerns regarding its overwhelming market control. It is unusual for the EU competition enforcer to issue breakup orders, but frustration has been growing due to Google’s alleged failure to address competition issues, as per the source.
At the time of reporting, both the Commission and Google had not provided immediate comments in response to Reuters’ inquiries.
Alphabet’s first-quarter ad sales declined compared to the previous year, amounting to $54.55 billion. However, this figure exceeded analysts’ expectations, while the parent company’s total revenue for the same period reached $69.79 billion.
Google’s dominance in the online advertising realm has faced increasing scrutiny in recent years. Complaints from competitors regarding its alleged anti-competitive practices have triggered antitrust investigations across various continents.
Earlier this year, the United States filed an ad tech lawsuit against Google, demanding the divestment of its ad manager suite. The lawsuit claimed that the search giant had unlawfully exploited its advertising dominance. Google has refuted these allegations and denied any wrongdoing.
The Wall Street Journal first reported the EU’s potential action on Monday.
