A hard blow for Google. The European Commission has ordered it to divest its digital advertising business
Google is facing the prospect of having to sell part of its internet empire, with the European Commission (EC) ordering the US company to “discontinue its lucrative digital advertising business”. This is in direct response to concerns that Google could abuse its dominant position in the European market. This was reported by Reuters, citing an official statement from the European Commission.
Commissioners started looking into Google, specifically the company’s advertising business, two years ago. “The company collects user data, sells advertising space and acts as an intermediary for online advertising,” Margrethe Vestager, the European Commissioner responsible for fair competition, summarised the findings of the investigation. “We are concerned that Google could use its market position to favour its own intermediary services,” Vestager said, according to The Verge. So, in a statement available online, the EC argues that “only a mandatory sale of part of Google’s services would address competition concerns.”
“The Commission’s investigation focuses only on a narrow aspect of our advertising business and is not new. We disagree with the EC’s view and will respond in that spirit,” Dan Taylor, vice president of global advertising at Google, responded to the EC’s order.
He stressed that the US company’s advertising technologies “help websites and apps fund content creation and help businesses of all sizes reach new customers effectively”. “Google remains committed to delivering value to advertiser and publisher partners in this highly competitive sector,” Taylor concluded. The US company has been trying to settle the case for three months after the investigation began. But European authorities were eventually frustrated by its slow pace and few substantive concessions, a source familiar with the matter told Reuters. Google is part of the Alphabet group. Google is the world’s most dominant digital advertising platform with a 28 percent market share of global ad revenue, according to research firm Insider Intelligence.
Ad revenue, which includes revenue from its search services, Gmail, Google Play, Google Maps, YouTube advertising, Google Ad Manager, AdMob and AdSense, reached $224.5 billion (£4.9 trillion) last year. That represents 79 percent of the company’s total revenue.
Source, photo: theverge.com, pixabay
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