Google is in the firing line after Brussels Competition Commissioner, Margrethe Vestager, on June 14 threatened to break up the global internet giant over what she said was ample evidence of the company’s abuse of its dominant position in internet advertising.
The tech behemoth laboured under “inherent, pervasive conflicts of interest”, she said.
She was referring to what she said was Google’s reign on “both sides” of the ad market – the seller and the buyer side – and stated it was guilty of abusing its position, which is illegal under European Union law, since possibly as far back as 2014.
Vestagar told journalists in Brussels that the problem was so endemic, and Google’s attempts to evade competition watchdogs so serious, that the only practically viable remedy would be to break up the company by forcing it to sell part of its advertising business.
Google, she said, takes unfair advantage of a dominant presence in the ad sales and ad purchasing markets and also in the principal exchange system where buyers and sellers are matched up.
The Commissioner suggested Google would have to “divest” – EU-speak for “sell” – part or all of its “sell-side tools” to avoid further potential for “conflict”.
According to the preliminary findings of a European Commission competition investigation, Google not only abused its position but also sought to evade watchdogs via means of subtle algorithm changes every time a problem was uncovered, in an attempt to “disguise” its behaviour.
“Divestiture”, Vestager said, would seem to be “the only way to resolve this”.
Unlike other premier internet players, which the Brussels executive is also investigating, “Google is everywhere”, journalists were told.
It is present “in every part of the value chain” and its algorithms defined the ads everyone saw when “opening newspapers in the morning”, reporters heard.
Google, which has already been fined €8 billion by Brussels – and is facing its fourth competition case – now has the opportunity to respond to the latest claims.
Challenged over whether another fine would make Google change its ways, Vestager said she was “asking myself the same question”.
The alleged ad-market abuse was grave, she said, because it was “absolutely unnecessary”, adding that the EC had “no provision against success”. However, forced corporate sales are rarely imposed by the Commission.
Investors seem unworried by Vestagar’s protestations. As of late afternoon on June 14, the EC’s most recent broadside, as with previous fines, had had little or no effect on Google’s share price.
