European Union (EU) regulators have initiated a fresh antitrust investigation against Google. The investigation will help the regulators to know whether the search engine tech giant is stifling the competition in the digital advertisement industry.
On Tuesday, the European Commission said that it will check whether Google is violating the EU competition rules and leveraging its digital ad services owing to its dominance in the industry. According to the data published by European Commission, the spending on digital ad services was USD 24 Billion in 2019. Google provides digital advertising services to its clients by showing the ads to the search engine users on the basis of their Internet history.
EU Commission Statement on the New Probe
“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,” European Commission Executive Vice President Margrethe Vestagar said in a statement.
Google Responds to the Investigation
“Thousands of European businesses use our advertising products to reach new customers and fund their websites every single day. They choose them because they’re competitive and effective. We will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers,” a Google spokesperson said in an email.
Google has not been trapped for the first time in the antitrust investigation. In March 2019, the US-based tech company was fined around USD 1.79 Billion for breaching the rules. This was the third time Google had paid in the EU antitrust probe. The first case of antitrust breach investigation against Google surfaced in 2016. The company had to pay USD 2.86 Billion in 2017, while the year later it was fined USD 5.1 Billion over abusing its dominance in the operating system to dominate the search engine industry.
EU regulators are investigating whether Google is favoring its online digital advertisement services. The commission has the right to impose penalize about 10% of the company’s annual revenue. Alphabet’s subsidiary reported USD 17.9 Billion in profits in its first quarter (Q1) 2021. Since last year same quarter, it has tripled its profits. The time period of an investigation is not determined, as it extends or shortens depending on the complexity of the case.
Tech Giant Likely to Face Antitrust Investigation in the US
A group of attorneys in the US is likely to file a lawsuit against Google as early as next week, accusing the company of violating the antitrust law on its app store, India Times published, citing the three sources familiar with the matter. The report says that the lawsuit was in the work since last year; however, it will be filing by next week. According to the two sources, the case will be filed in federal court in North Carolina.
In March 2021, the game maker Epic Games filed a lawsuit against the company in Australia’s federal court. Last year, the gaming company said that the 30% commission on in-app purchases was too high. Moreover, it said that Google is abusing its dominance in the market. Thus, it decided to file a lawsuit against the tech giant in the US. In the house of antitrust cases, Google is not the only one who has been house-arrested by many cases. Tech companies such as Apple and Amazon have also caught themselves in antitrust investigations.
Tech Giants Facing New Antitrust Bills
The US lawmakers have introduced six antitrust bills that aim to break the power of the tech giants such as Apple, Google, Facebook, and Amazon in the country. The two of the bills focus on banning companies to acquire subsidiaries that run on the same platform. “From Amazon and Facebook to Google and Apple, it is clear that these unregulated tech giants have become too big to care,” said US Representative Pramila Jaypal, who supported these bills.
In the response to the bills, Google and Amazon have accused lawmakers of harming small businesses over the proposed legislation. “As many groups and companies have observed, the bills would require us to degrade our services and prevent us from offering important features used by hundreds of millions of Americans,” Google’s VP of government affairs and public policy Mark Isakowitz said in a statement.