Google’s ad business could come under fire by end of 2021

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Alphabet’s Google could face the biggest regulatory threat later this year, as an exclusive report from Reuters reveals. EU antitrust regulators are geared up to open a formal investigation into Google’s highly valuable digital advertisements business, before 2021 ends, according to people familiar with the matter.

This case would herald a new battleground by the EU antitrust watchdog against Google. In the last decade, the EU competition regulator has fined the company more than 8 billion euros ($9.8 billion), for blocking competitors in online shopping, Android phones, and online ads.

A deeper probe

An EU probe would be aimed at Google’s position, focusing on its relationships with rivals, intermediaries, publishers, and advertisers, according to people close to the matter. The indications hint at deeper scrutiny, unlike what transpired with the French antitrust agency’s case which ended this past week.

Google made $147 billion in revenue from online ads alone in 2020. That is more than any other company on the planet. Ads on its subsidiaries (Gmail, YouTube, etc) accounted for most of the sales and profits. About 16% of revenue came from its networks or display business, where other media companies use its tech to sell ads on their apps and websites.

A string of lawsuits

The US Justice Department, joined by several states, sued the company last year, for abuse of its dominance in search ads. This collective, which was led by Texas in a later lawsuit, had its sights on anti-competitive behaviour on the network side of the business.

France settled with Google last week for $268 million and several commitments, over similar accusations related to the company’s network business. The new EU inquiry could target all of Google’s ad businesses.