notwithstanding being a major victory, Google is still being investigated for antitrust violations notwithstanding the General Court’s decision.
By vacating a €1.49 billion ($1.66 billion) sentence levied by the European Union (EU) for antitrust infractions in its online advertising business, Google has achieved a significant victory. The European Commission, which levied the fine in 2019, suffered a setback when the EU’s General Court quashed the fine.
This lawsuit concentrated on a particular area of Google’s advertising business, wherein the corporation sold advertisements that showed up on websites run by third parties next to search results. Google was accused by the European Commission of abusing contract exclusivity agreements to prevent these websites from hosting advertisements offered by its competitors. However, the Commission “committed errors” in its analysis, the court decided, failing to establish that Google’s actions damaged consumers or the competition.
What Was the Subject of the Case?
The use of exclusivity agreements by Google with third-party websites was the focus of the €1.49 billion fine. These terms allegedly restricted advertisers’ options and increased expenses by prohibiting the websites from showing advertisements from other companies.
According to the European Commission, this strengthened Google’s dominating position in the market and provided it an unfair advantage. The General Court, however, thought otherwise. It concluded that the Commission had not sufficiently shown how these clauses impede consumer choice or innovation.
Given that Google has been hit with many fines totaling about €8 billion in Europe over the past ten years, the decision offers much-needed respite. Even with this victory, Google is still facing regulatory issues.
Google’s Prolonged Antitrust Suits
notwithstanding being a major victory, Google is still being investigated for antitrust violations notwithstanding the General Court’s decision. The company’s business activities have been the subject of multiple investigations by the EU, which are mostly focused on its advertising technology (ad-tech) division.
Roughly 77% of Google’s entire revenue came from its ad-tech division, which brought in $237.85 billion in 2023 alone. Regulators are concerned about this accomplishment because they believe Google’s monopoly on the digital ad industry stifles competition.
European publishers, meanwhile, dismissed the offer as inadequate. They maintained that there are significant conflicts of interest because of Google’s involvement in every step of the ad-tech supply chain. They said that the bigger problem of Google’s market domination would not be solved by selling AdX alone.
Although the European Commission is aware of these worries, rumors have it that authorities won’t likely compel Google to sell off any assets right away. Alternatively, during the next several months, the Commission might issue orders compelling Google to cease its purportedly anti-competitive actions. If Google doesn’t comply, there may be a further ruling that is more significant, including the forced sale of additional assets.
Why Is AdX Important?
Ad Exchange, or AdX for short, is a real-time marketplace where advertisers can purchase available ad space from publishers. Regulators have harshly criticized Google for its involvement in nearly every aspect of the digital ad business, from the placement to the selling of advertisements. Margrethe Vestager, the head of EU competition, has made a strong case for Google to resolve its conflicts of interest.
The European Commission may not insist on an instant asset sale, but it has the authority to issue additional directives or limitations that alter Google’s business practices within the EU. In the upcoming months, a ruling on this issue is anticipated.
Regulators in the US and the UK Attack Google’s Ad-Tech Dominance
Google faces antitrust issues outside of the EU as well. The Department of Justice (DOJ) in the United States is also attempting to dismantle portions of Google’s ad-tech company. The DOJ has specifically targeted DoubleClick for Publishers (DFP) and AdX under Google’s Ad Manager. Similar to the EU complaint, American regulators contend that Google’s hegemony in the ad-tech sector suppresses competition and drives up advertising expenses.
Google is under investigation by competition authorities in the UK for allegedly abusing its dominant position in the digital advertising market. This demonstrates how the company’s legal issues are a part of a global regulatory campaign against Big Tech.
Google has insisted that there is competition in the digital advertising sector despite these obstacles. A Google representative stated, “The European Commission’s case regarding our third-party display advertising products is based on incorrect interpretations of the ad-tech sector, which is intensely competitive and rapidly evolving.”
What’s Coming Up for Google?
Google’s legal triumph in the EU General Court provides short-term respite for the time being. Future orders, including divestiture, are still a possibility, though. The company’s hold on the worldwide digital ad industry will be tightly monitored while regulators in Europe, the United States, and the United Kingdom carry out more investigations.
Will authorities be satisfied with Google’s plan to spin off a portion of its ad-tech business? Or will more divestitures be required to completely resolve antitrust issues? These inquiries will probably influence the course of Google’s upcoming legal struggle with international authorities as the biggest digital advertising platform in the world negotiates a challenging regulatory environment.
