Google may face EU antitrust charges over its adtech business

Google may face EU antitrust charges over its adtech business

Insiders told Reuters that Alphabet’s Google may face EU antitrust proceedings over its digital advertising business in 2023, placing the tech giant at risk of its fourth EU punishment of more than a billion euros.

Alphabet’s largest revenue generator is Google’s ad division, which produced more than $100 billion in last year. Despite Alphabet’s attempts to expand into selling hardware, subscription services and cloud computing technologies over the last decade, the ad division contributed to over 80 percent of yearly revenue.

In June last year, the European Commission opened an inquiry into Google’s adtech business, fearing that the US tech giant was gaining an unfair edge over competitors and advertisers. The tech giant, which faces a fourth billion-euro penalty, later attempted to settle the lawsuit, though the concessions were tiny and highly preliminary, according to one of the sources. Over the previous decade, Google has paid nearly €8 billion in EU antitrust fines.

According to one of the sources, the EU competition enforcer is likely to bring a new set of charges early next year, though the date might shift. The source also said that the European Commission had asked third parties to remove private information from their contributions, which is routinely done before granting Google access to documents after issuing a statement of objections.

$230 billion in ad revenue expected

The lawsuit reportedly centres on Google’s advertising-driven business strategy, impacting advertisers, publishers, ad tech suppliers, and consumers worldwide.

Google’s dominance in internet advertising has been called into doubt in recent years. Complaints from competitors regarding alleged anti-competitive actions have resulted in antitrust probes on five continents.

During the year’s first half, Google’s ad division produced about $111 billion in revenue. According to Refinitiv projections, analysts predict Google to generate $233 billion in ad revenue this year, nearly 11 percent up from 2021.