Google to be investigated over ‘dominance’ in ad market

The European Commission has opened an investigation into whether Google is dominating the online-advertising market at the expense of its rivals.

It will examine Google’s role in collecting data, selling advertising space and acting as an online-advertising intermediary.

The commission is concerned the technology giant is making it hard for other online advertisers to compete.

Google has said it will co-operate with the inquiry.

‘Fair competition’

The fact the company is present “at all levels of the supply chain for online display advertising” is concerning, commission executive vice-president Margrethe Vestager said.

“Online-advertising services are at the heart of how Google and publishers monetise their online services,” she said.

“Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary.

“A level playing field is of the essence for everyone in the supply chain.

“Fair competition is important – both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers.”

The inquiry will look at:

  • the obligation to use Google’s services and or Google Ads to purchase display ads on YouTube
  • the obligation to use Google Ad Manager to service online display ads on YouTube
  • the apparent favouring of Google’s ad exchange, AdX, by its other services
  • the restrictions placed by Google on the ability of rival advertisers to access data about user identity or behaviour
  • Google’s plans to prohibit third-party cookies on Chrome
  • Google’s plans to stop making the advertising identifier available to third parties on Android smart mobile devices

Google says its plans will strengthen user control over their own data.

Its Privacy Sandbox alternative to cookies, which track users as they move around the web, on Chrome will provide only anonymised feedback.

But there are concerns it will also favour Google over its rivals.

Increased scrutiny

In the UK, the Competition and Markets Authority (CMA) has won commitments from the search giant any alternatives it develops will avoid this.

Google has also agreed with the CMA to publicly disclose the results of tests of new technologies and limit how it uses and combines individual user’s data for advertising purposes.

Google has been hit with a series of EU fines in the past three years, totalling 8.25bn euros (£7bn).

In March 2019, it was fined £91m for abusing its market dominance by restricting third-party rivals from displaying search ads between 2006 and 2016.

Google and Facebook together account for most of the global internet-ad sales market but the practices of both are now under increased scrutiny from regulators around the world.