Written by: Haim Ravia, Dotan Hammer
The European Commission announced it had fined Google €2.95 billion for breaching EU antitrust rules. The Commission concluded that Google abused its dominant position by distorting competition in the online advertising technology (‘adtech’) industry. According to the EU Commission, this behavior harmed online publishers, competing adtech providers, advertisers, and consumers.
The European Commission’s investigation found that Google is dominant in two European Economic Area (EEA)-wide markets: the market for publisher ad servers, primarily through its service “DFP” (DoubleClick For Publishers), and the market for programmatic ad buying tools for the open web, through “Google Ads” and “DV360”.
The abuse the Commission identified, which occurred between at least 2014 and the present, involved self-preferencing Google’s own ad exchange, ‘AdX’, in violation of Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’). Google favored AdX in two primary ways:
- Using DFP: DFP, the dominant publisher ad server, favored AdX in the ad selection process, for instance, by informing AdX in advance of the value of the best competitor bid it needed to beat.
- Using Buying Tools: Google’s ad buying tools (Google Ads and DV360) mainly placed bids on AdX, often avoiding competing ad exchanges, making AdX the most attractive option.
These actions intentionally gave AdX a competitive advantage and may have foreclosed competing ad exchanges, reinforcing Google’s central role and ability to charge high fees.
The Commission ordered Google to cease these self-preferencing practices and implement measures to end its inherent conflicts of interest along the adtech supply chain. Google has 60 days to inform the Commission of its proposed measures in response to the decision. The Commission noted its preliminary view that only the divestment of part of Google’s services might address the inherent conflicts, but it will first assess Google’s proposals before imposing a structural remedy.
Click here to read the EU Commission’s press release of its decision in the anti-trust case against Alphabet Inc. and Google LLC.
