Abuse of Dominance Judged in Digital Advertising Market
Additional Investigation to Announce Final Verdict
The European Union (EU) is expected to impose sanctions on Google, which dominates the global digital advertising market, at a level equivalent to corporate breakup for antitrust law violations in Google's most profitable advertising business sector.
According to the Wall Street Journal (WSJ) and others on the 14th (local time), EU regulators, who have been investigating whether Google has violated antitrust laws in the digital advertising market, are expected to take the drastic measure of requiring Google to divest part of its digital advertising business.
The EU's antitrust regulatory body, the European Commission, released a review report on Google's alleged antitrust violations based on an investigation that began in June 2021. In this report, the Commission preliminarily concluded that Google has exercised overwhelming market dominance through its digital advertising platform, 'Ad Exchange.'
Google acts as a direct digital advertising seller and also mediates advertising between websites accessible through Google and advertisers. The Commission's assessment is that in this process, Google engaged in abusive and illegal practices such as driving out major competitors from the advertising market and raising advertising prices. The EU pointed out that these illegal practices appear to have been routinely conducted since at least 2014.
Margrethe Vestager, Vice President of the European Commission, stated, "This could lead not only to harm to Google's competitors in the advertising market but also to increased costs for advertisers," and warned that if confirmed through further investigation, these actions will be punished.
The EU is even considering ordering Google to divest part of its advertising business. Vice President Vestager said, "As a preliminary view, we are considering requiring Google to divest some services," adding, "it is very rare for us to request a divestiture from a specific company, and we have not yet made a formal request to Google."
However, she added that depending on the results of further investigations, there is a possibility that Google will be asked to divest part of its advertising business to resolve anti-competitive behavior. According to the Associated Press, this is the first time the EU has mentioned divestiture of a major part of a business for antitrust violations.
This move is seen as the beginning of proactive regulation by authorities, who have so far focused on ex-post regulation (imposing fines) of Big Tech. The European Commission believes that due to the complexity of the digital advertising market, it is difficult for regulators to monitor corrective measures by the company, making corporate breakup-level actions such as divestiture inevitable.
Google has opposed this. Google stated, "We disagree with the European Commission's investigation findings and will respond accordingly," and countered, "Our advertising technology tools help businesses of all sizes effectively reach new customers."
The European Commission's decision aligns with the Biden administration's moves in the United States to regulate Big Tech. Earlier, in January, the U.S. Department of Justice filed an antitrust lawsuit against Google, accusing it of illegally abusing its dominance in the digital advertising market and harming fair competition. At that time, the Department of Justice requested the court to remove Google's advertising management platforms, including Ad Exchange, from the market.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
