Exclusive: Google faces EU antitrust charges over its adtech business – sources

BRUSSELS, Oct 13 (Reuters) – Alphabet (GOOGL.O) unit Google could face EU antitrust cases next year over its digital advertising business, sending the company its fourth EU fine of more than €1 billion is suspended with the matter said on Thursday.

Google’s advertising business, which generated over $100 billion in revenue last year, is Alphabet’s biggest moneymaker. It accounted for about 80% of annual sales, despite efforts over the past decade to drive sales of hardware, subscription services, and cloud-computing technology.

The European Commission launched an investigation into Google’s adtech business in June last year amid concerns the US tech giant could gain an unfair advantage over rivals and advertisers.

The company, which is risking its fourth billion euro fine, subsequently tried to settle the case, but concessions were minor and very preliminary, one of the people said. Google has collected more than 8 billion euros ($7.7 billion) in EU antitrust fines over the past decade.

The EU competition authority is likely to bring charges early next year, although timing could change, one of the people said.

The commission has asked third parties to delete sensitive details in their submissions, which is usually a precursor to allowing Google to access documents after receiving a statement of objections, one of the people said.

Google could avert the charges by offering further concessions to settle the investigation. Some companies prefer to see the exact regulatory concerns before proposing tailored remedies.

The commission declined to comment. Google, the world’s leading seller of online advertising, well ahead of Facebook and Instagram owner Meta Platforms Inc (META.O), had no immediate comment.

HEART OF GOOGLE’S BUSINESS MODEL

The case goes to the heart of Google’s advertising-driven business model and affects advertisers, publishers, ad-tech providers and users alike, said Dieter Paemen, a partner at law firm Clifford Chance, who has previously advised Google’s competitors on other cases.

“It’s been a long time coming – advertisers and publishers have been in an uproar about Google’s ad tech behavior for many years. Google operates on multiple sides of the advertising transaction, doing bad business for both publishers and advertisers,” he said.

Google’s dominance of online advertising has been increasingly questioned in recent years. Complaints from competitors about its alleged anti-competitive practices have led to antitrust investigations on five continents into its practices.

Google’s ad business generated nearly $111 billion in revenue in the first half. Analysts expect Google to generate $233 billion in ad sales this year, up about 11% year over year, according to estimates from Refinitiv.

Google’s ad business has many parts, but search ads lead in terms of revenue. Other facets include selling ads on third-party partner sites and apps, and selling ads on YouTube, Gmail, and other internal services.

Reporting by Foo Yun Chee, additional reporting by Paresh Dave in Oakland, California; Editing by Susan Fenton, David Evans and David Gregorio

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