European Commission opens antitrust investigation on Google

The European Commission has opened a formal antitrust investigation to assess whether Google has violated EU competition rules by favouring its own online display advertising technology services in the so called “ad tech” supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers. The formal investigation will notably examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Online advertising services are at the heart of how Google and publishers monetise their online services. Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary. So Google is present at almost all levels of the supply chain for online display advertising. We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack. A level playing field is of the essence for everyone in the supply chain. Fair competition is important – both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers, to generate revenues and funding for content. We will also be looking at Google’s policies on user tracking to make sure they are in line with fair competition.“

Many publishers rely on online display advertising to fund free online content for consumers. In 2019, display advertising spending in the EU was estimated to be approximately €20 billion. Google provides several advertising technology services that intermediate between advertisers and publishers in order to display ads on web sites or mobile apps.

The Commission’s investigation will focus on display advertising where Google offers a number of services both to advertisers and publishers. As part of its in-depth investigation, the Commission will in particular examine:

• The obligation to use Google’s services Display & Video 360 (‘DV360′) and/or Google Ads to purchase online display advertisements on YouTube.
• The obligation to use Google Ad Manager to serve online display advertisements on YouTube, and potential restrictions placed by Google on the way in which services competing with Google Ad Manager are able to serve online display advertisements on YouTube.
• The apparent favouring of Google’s ad exchange “AdX” by DV360 and/or Google Ads and the potential favouring of DV360 and/or Google Ads by AdX.
• The restrictions placed by Google on the ability of third parties, such as advertisers, publishers or competing online display advertising intermediaries, to access data about user identity or user behaviour which is available to Google’s own advertising intermediation services, including the Doubleclick ID.
• Google’s announced plans to prohibit the placement of third party ‘cookies’ on Chrome and replace them with the “Privacy Sandbox” set of tools, including the effects on online display advertising and online display advertising intermediation markets.
• Google’s announced plans to stop making the advertising identifier available to third parties on Android smart mobile devices when a user opts out of personalised advertising, and the effects on online display advertising and online display advertising intermediation markets.

If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).

The Commission will take into account the need to protect user privacy, in accordance with EU laws in this respect, such as the General Data Protection Regulation (GDPR). Competition law and data protection laws must work hand in hand to ensure that display advertising markets operate on a level playing field in which all market participants protect user privacy in the same manner.

The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.

Background

Article 101 of the TFEU prohibits anticompetitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market. Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.

Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to also apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated.

The Commission has informed Google and the competition authorities of the Member States that it has opened proceedings in this case.

There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.

More information on this investigation will be available on the Commission’s competition website, in the public case register under the case number AT.40670.