EU May Request Google to Divest Portions of Ad-Tech Operations

According to a source familiar with the situation, European Union antitrust regulators may require Alphabet Inc’s Google to divest a portion of its advertising technology business.

The EU’s top antitrust watchdog, the European Commission, could file a formal complaint against Google as early as Wednesday, a source said, further boosting transatlantic efforts to reduce the tech giant’s dominance in digital advertising.

In 2022, the Commission launched an investigation into Google’s extensive presence at nearly every level of the online display advertising supply chain and expressed concern about its dominance.

Dissolution orders issued by the EU competition authority are rare. However, according to the source, frustration has increased when Google has not solved the competition problems.

The commission and Google did not immediately respond to Reuters requests for comment.

According to research company Insider Intelligence, Google is the world’s most dominant digital advertising platform with a 28 percent market share of global advertising revenue.

Alphabet’s first-quarter ad sales fell from a year ago to $54.55 billion, but exceeded analysts’ expectations. Google’s parent company’s total revenue during the period was $69.79 billion.

Google’s dominant position in online advertising has been questioned more and more in recent years. Complaints from competitors about its alleged anti-competitive practices have led to antitrust investigations into its practices on several continents.

Earlier this year, the United States launched an ad tech lawsuit against Google, demanding the sale of its ad management software, claiming the search giant was illegally abusing its dominant position in online advertising. Google has denied any wrongdoing.

The Wall Street Journal was the first to report on the EU’s likely action on Monday.