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The future of the Google Ads business has never been more uncertain in Europe. Recently, Google was accused of violating antitrust laws by the European Commission. This case adds to a series of similar cases that have been brought against Google, all of which question the fundamental business model of the internet giant.
What Happened?
In an investigation conducted by the European Commission, they found that Google is exploiting its industry dominance by prioritizing its own ads and intermediation services. This anti-competitive behaviour has given Google an unfair advantage over other digital advertising providers. Nevertheless, the European Commission stated that behavioural improvements are insufficient to address the antitrust violations. More severe measures will have to be taken to promote fair competition.
The nature of the ongoing situation highlights the scrutiny and challenges faced by Google as it continues to navigate the complex landscape of online advertising and competition in European markets.
What the EU Charges Could Mean for Google’s Ad Business?
The European Commission is strongly suggesting that “mandatory divestment” is the best and only resolution to the antitrust violations. This could give Google no choice, but to sell a part of its advertising business. In response to these charges, Google’s Vice President, Dan Taylor has said that the investigation’s findings only affect a small portion of Google’s advertising business.
If Google is required to sell a part of its ad business, the future of online advertising will never be the same. Therefore, the outcome of this case will have significant implications for Google given that most of their profit comes from advertising.
Why We Care
The forced sale of a portion of Google’s ad business could re-shape digital policies along with the current digital marketing landscape. This sale could promote fair competition and spur innovation leading to the development of new advertising tools. A more competitive advertising market will result in fairer pricing making it easier to advertisers to promote their products and services. Additionally, the market would become more transparent market giving advertisers greater control over their campaigns.
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