After a lengthy investigation, the European Union accused Google of unfair digital advertising practices.
As a result of the European Commission’s investigation into unfair digital advertising practices, the European Union has filed a formal antitrust complaint against Google.
Advertisements are Google’s main source of revenue. In 2022 alone, parent company Alphabet earned $225 billion from online advertising, which is about 80 percent of total revenue. By comparison, that figure was $168.6 billion in 2020. However, Google’s most profitable product – in fact, its only profitable one – appears to be holding back competition, and the EU is finally ready to stand in the way.
Since Google Ads has long been the main platform for targeted advertisements, in 2021 the authorities in Brussels began to investigate Google’s advertising practicestrying to determine whether the company is preventing competing companies from accessing user information for online advertising purposes.
Google’s partnership with Meta (Facebook) was originally part of an EU investigation but was dropped in 2022. The new evidence, provided by Portuguese competition authorities, was later added to the investigation into the tech giant’s advertising empire, which is also involved in litigation in the UK and the US.
Now, in an official complaint, the European Union has outlined why it believes the company violated competition laws. It is only one step in a process that could take time, the conclusion of which could significantly harm Google, because the penalties for violating these laws can reach up to 10 percent of the company’s total revenue. Fines imposed by Brussels have so far cost Google more than 8 billion euros.
The European Commission could also force Google to change its business practices and company structure, which could be far more damaging to the giant than a financial delay. However, it remains to be seen how the process will proceed.
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