The European Union has launched an investigation into whether Google abused its market power by favoring its own advertising products over those of competitors, the European Commission announced Tuesday.

Margrethe Vestager, executive vice president of the panel and a longtime critic of Big Tech, said the Silicon Valley company is present “at almost all levels of the supply chain for online display advertising.” She added that Google’s process for surveilling users ― which includes collecting search data as well as tracking users – will be part of the inquiry.

Advertising technology encompasses a dizzying number of products and tools built by hundreds of companies. Some are used by web publishers to sell ad space, while others are used by advertisers to buy it. In between sit multiple levels of exchanges and advertising networks that connect the two. Although many companies compete at each level, Google dominates the landscape, selling tools for nearly every step.

Since the tech giant is one of the largest sellers of online advertising space too, it has been accused by competitors of using its heft in the industry to push people to buy its own ads over others. For example, placing ads on Google-owned YouTube requires going through Google’s own ad-buying platform, essentially forcing advertisers to use the Google tool if they want access to the massive video site’s 2 billion users.

“We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack,” Vestager said.

Google contends that its tech services fees are lower than reported industry averages, and that most publishers use a range of advertising technologies.

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“Thousands of European businesses use our advertising products to reach new customers and fund their websites every single day,” a Google spokeswoman said in an email. “They choose them because they’re competitive and effective.”

The investigation comes just two weeks after the French government fined Google 220 million euros for abusing its position in the advertising tech market. The company agreed to change some of its tools so they plug-in more easily with competitors’ products, French authorities said.

In the U.S., lawmakers have zeroed in on Google’s advertising business, too. Politicians have likened the online advertising industry to the stock market, but where Google plays the role of both exchange and broker, allowing it to see the most favorable prices and prioritize its bids over those of others.

A lawsuit from the Texas attorney general launched in 2020 also makes that claim, and argues Google’s practices have pushed up the cost of advertising for businesses, therefore harming American consumers. Google has called the Texas lawsuit “meritless” and is fighting it in court.

Tuesday’s E.U. investigation is just the latest of several actions by Europe attempting to rein in Silicon Valley. A 2016 E.U. regulation forced companies to adhere to strict data privacy requirements related to their collection and use of online data, forcing some companies to reshape their data practices for fear of steep fines. And under Vestager’s leadership, the European Commission has fined Google billions of dollars for its practices in several other markets.


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