Google Must Divest Part of Its Display-Ads Business

Yet another government has concluded that Google cannot be trusted with the display-ads market in its current form. 

The European Commission announced a preliminary “Statement of Objections” on Wednesday in which it concluded that Google had abused its dominance of the buy and sell sides of programmatic display advertising to force publishers and advertisers to do business through Google’s own exchange—and that only forcing Google to divest some of those business units will end that abuse.

Specifically, the commission found that for at least the last nine years, Google exploited its dominance of the sell-side publisher ad server market, where third-party sites sell ad spots on their pages, to favor its own AdX exchange over competitors. It further found that on the buy side, where Google places bids from advertisers, Google mostly limited those bids to AdX. Both moves allowed Google to keep more money than it would have in a properly functioning market.

The commission rejected any sort of behavioral remedy because Google is too big not to fail again.

“This leads to a situation of inherent conflicts of interest for Google,” the finding says of Google dominating the sell and buy sides while also running the largest ad exchange. “The Commission’s preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns.”

In a statement also posted Wednesday, European Commission EVP Margrethe Vestager supported those points. “We see the risk that Google’s conduct distorted competition among ad exchanges: rather than letting the best of the ad exchanges win the race, the helping hand of the powerful Google ecosystem gave Google’s own exchange a unique head start over all other rivals in the industry,” she wrote. “AdX could afford to keep its commissions high without losing its advertisers.”

Vestager added that Google has a history of responding to past reports of abuses of display-ads market power by making subtle changes to its behavior “to make it more difficult to detect, but with the same objectives, with the same effects.” Neither her statement nor the commission’s recommend which parts of the display-ads business Google would have to dump, however.

The findings map closely with those of the US Department of Justice, which filed an antitrust lawsuit against Google in January alongside a group of states, and those of a separate group of states led by Texas that filed their own antitrust lawsuit in December 2020.

Google responded in a blog post from display-ads VP Dan Taylor that brushed aside the commission’s findings in language similar to its past dismissals of the federal and state antitrust lawsuits.

“We look forward to showing how we have enabled higher-quality, more effective digital ads that have helped fund broader access to content and information online for everyone,” he wrote. “We compete with hundreds of companies in this space, including household names like Amazon, Microsoft, and Meta as well as specialized advertising technology companies like Criteo, The Trade Desk, and many others.”

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