In a development that could send shockwaves through the tech industry, Alphabet’s Google may face an order from European Union antitrust regulators to sell a portion of its advertising-technology business.
A source with direct knowledge of the matter revealed this information to Reuters on Monday, shedding light on the potential measures to curb the tech giant’s stranglehold on the digital advertising landscape.
According to the source, the European Commission, the EU’s leading antitrust authority, is poised to issue a formal complaint against Google as early as Wednesday, signaling a significant escalation in trans-Atlantic efforts to counter the company’s dominant position in the digital advertising domain.
A rare occurrence
The Commission launched an investigation in 2022 to examine Google’s extensive presence across various online display advertising supply chain segments. It subsequently expressed concerns about its overwhelming market power.
Notably, directives to break up companies from EU competition regulators are relatively rare occurrences. However, the source relays that frustration has been mounting due to Google’s alleged failure to address competition concerns.
The Commission and Google have refrained from providing immediate comments in response to Reuters’ inquiries.
Research firm Insider Intelligence says Google holds 28% of global ad share revenue
That fact solidifies its position as the preeminent digital advertising platform worldwide. Although Alphabet, Google’s parent company, experienced a decline in first-quarter ad sales compared to the previous year, generating $54.55 billion, the figures surpassed analysts’ expectations. Overall revenue for the same period reached $69.79 billion.
The dominance of Google in online advertising has faced mounting scrutiny in recent years. Rivals have lodged complaints alleging anti-competitive practices, triggering antitrust investigations on multiple continents.
The United States initiated an ad tech lawsuit against Google earlier this year. It demanded the divestment of its ad manager suite. The lawsuit contended that the search giant illicitly abused its commanding position in online advertising. Google vehemently denied any wrongdoing.