Google is in the EU antitrust spotlight again. The European Commission has opened a new investigation into the company. The regulator is trying to figure out whether its digital advertising business gives the Alphabet unit an unfair advantage over rivals and advertisers. This time, the probe is likely to deal a serious blow to Google’s financial performance.
"We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack," European Competition Commissioner Margrethe Vestager said, adding that "online advertising services are at the heart of how Google and publishers monetize their online services."
As part of the investigation, the Commission is making moves to find out whether Google distorts competition by restricting third-party access to its users’ data for advertising purposes, while reserving such data for its own use. If this information is confirmed, the company will face huge fines. In particular, the US company may be obliged to separate from or restrict its online ads operations. This, in turn, "could have a significant impact on the money generated through online advertising."
"This is probably the probe that many people were waiting for because it goes to the core of Google’s business," Aitor Ortiz, an analyst at Bloomberg Intelligence, noted.
Notably, the EU has long been wondering why this business area of the company is so suspiciously fruitful. Last year, Google generated $147 billion in revenue from online ads on its search engine, Gmail, and YouTube.
