The European Commission, one of the seven EU institutions, confirms the initiation of a formal investigation into the advertising business of the Google company . This move, advanced yesterday by Reuters, could lead to one of the largest fines in history for illicit practices in the advertising market.
Regulators in the European Union see Google as present at almost every level of the online advertising supply chain. Consequently, they will investigate whether you have used your position to limit the scope of the competition by restricting access to user data for advertising purposes , while reserving it for your own use.
Precisely, Google has a huge advertising apparatus. The internet giant collects data to deliver targeted advertising. Then, through a wide range of solutions, sells advertising space and acts as an intermediary between clients and third-party platforms .
According to a Bloomberg report, this is the first time that the European Union has deeply examined Google's advertising business . That is, what are the parameters they use to serve the ads and set the prices. Also, what happens when a conversion occurs (a user interacts with the ad).
The EU decision could mark changing the rules of the online advertising market if Google is forced to change its business model. Indeed, an investigation by the French Competition Authority revealed that the Mountain View company used its technologies to take a dominant position and leave competitors at a disadvantage. This behavior resulted in a fine of 220 million euros .
Google, a giant that defends itself
Google claims that European companies choose its advertising services “because they are competitive and effective.” It also says that it will collaborate with the European Commission to answer all your questions and demonstrate the benefits of its products.
If the European Union finds Google guilty, it could face a huge penalty. EU fines are based on sales and are capped at 10% on annual income . In the past, the company has already been fined more than 8,000 million euros.
According to Forbes, the Internet giant made $ 147 billion in advertising revenue last year. These figures represented the highest advertising revenue for a single company in the world. Additionally, they accounted for half of all online advertising spending in the United States.
