The American tech giant is in conflict with the European Commission over its dominance of the digital advertising sector.
A message from Brussels to Google: could you please dismantle yourself?
The tech giant must indicate this month of November how it intends to comply with the European Commission’s decision of September, which considered that it had abused its dominant position in the online advertising sector.
After having imposed a fine of 2.95 billion euros on Google, Brussels is considering what was previously unthinkable: the definitive sale of a branch of an American company, preferably voluntarily, but potentially forced if necessary. The situation is “very unusual,” says Anne Witt, professor of competition law at Edhec Business School in Lille.
“Structural remedies are almost unprecedented at the EU level,” she adds. “It’s really heavy artillery.”
In its decision of September, the Commission took “an unusual and unprecedented step,” according to Anne Witt, by asking Google itself to propose the solution, while specifying, with caution, that any solution not involving a sale of certain parts of its advertising technology business would fall under the EU antitrust authority.
“It seems that the only way for Google to put an end to its conflict of interest is a structural solution, such as the sale of part of its Adtech business,” said at the time executive vice-president of the Commission Teresa Ribera, responsible for competition issues.
As the deadline for Google to inform the Commission of its intentions approaches, the possibility of an orderly dismantling by Brussels of an American tech champion is unlikely to go unnoticed in Washington, even if Donald Trump’s administration is conducting its own lawsuits against the search engine. (Google represents 90% of Alphabet’s revenue, the holding company valued at $3,300 billion and headquartered in Mountain View, California.) Google said it would appeal the Commission’s decision, which, according to the firm, requires changes that would harm thousands of European companies. “There is nothing anti-competitive about providing services to buyers and sellers of advertising, and there are more alternatives to our services than ever before,” wrote Lee-Anne Mulholland, vice president and head of regulatory affairs at Google, in a blog post in September.
Proposing a voluntary dismantlement of Google marks the culmination of a decade of enforcement of EU antitrust rules in digital markets, during which ‘behavioural’ measures have had little effect, and a unique alignment, on the calendar as on the substance, between the United States and the EU in their investigations conducted in parallel on the domination of Google in terms of advertising technology.
“It would have been unthinkable, ten years ago, that there was a case in the United States and a similar one in Europe whose potential outcome would be a dismantlement,” says Cori Crider, executive director of the Future of Tech Institute, who advocates for a dismantling.
The Commission officially launched the investigation into all of Google’s advertising technologies in 2021, following a series of complaints from news companies that had seen Google take over the real-time bidding system where publishers and advertisers agree on the price and location of online advertisements.
Google’s control of these auctions, as well as the infrastructure used by both sides of the market, amounts to allowing Goldman Sachs or Citibank to own the New York Stock Exchange, the US Department of Justice illustrated in its legal action in 2023.
This has also created a situation in which, on both sides of the Atlantic, financially distressed press companies have seen Google absorb an increasing share of online advertising revenues and ultimately pose a threat to journalism itself.
“This is not just a matter of competition law, but the future of journalism,” said Alexandra Geese, German Green MEP. On the other side of the Atlantic, publishers also found themselves in a difficult situation.
In April, the federal judge overseeing the US government’s lawsuit against Google ruled that the search engine had unlawfully maintained its monopoly on parts of the advertising technology market. Despite this alignment and disillusionment with the impact of fines and behavioural solutions, the Commission still faces a ‘major legal obstacle’ if it is not satisfied with the solution proposed by Google, argues Anne Witt.
The American legal system is more conducive to ordering dismantlements, both because the magistrates have a wide field of action to repair a damage caused to the market, but also because the lawsuits brought by the US government to dismantle Google and Meta rely on historical precedents, says Anne Witt, which is not the case in Europe.
In any event, Google must file its proposed remedies within 60 days of the notification of the Commission’s decision announced on 5 September.
A spokesperson for the company stated that it did not agree with the Commission’s accusations, and therefore with the idea that structural corrective measures would be necessary. The company is expected to file its appeal in the coming days.
Although Google suggested asset sales to the Commission during the antitrust investigation—an idea rejected by Brussels—, the company does not intend to sell all of its advertising technology, according to a person familiar with the matter, to whom anonymity was granted due to the sensitive nature of the case.