Exclusive: Google faces EU antitrust charges over ad tech business – sources

BRUSSELS, Oct 13 (Reuters) – Alphabet (GOOGL.O) unit Google could face EU antitrust charges next year over its digital advertising business, making the company a fourth fine in the European Union, people familiar with the matter said. Risk of more than 1 billion euros. things said on thursday.

Google’s ad business generated more than $100 billion in sales last year and is Alphabet’s biggest moneymaker. It still accounts for about 80% of annual revenue, despite efforts to sell hardware, subscription services and cloud computing technology over the past decade.

Last June, the European Commission launched an investigation into Google’s ad tech business, concerned that the U.S. tech giant could gain an unfair advantage over rivals and advertisers.

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The company risked a fourth billion-euro fine and then sought a settlement, but the concessions were small and very preliminary, one of the people said. Google’s EU antitrust fines have exceeded 8 billion euros ($7.7 billion) over the past decade.

The EU competition enforcement agency could issue the allegations early next year, but the timing could still change, one of the people said.

The committee has asked third parties to delete confidential details of their submissions, often a prelude to allowing Google to access documents after receiving a statement of objection, one of the people said.

Google could avoid the allegations by offering more concessions to settle the investigation. Some companies prefer to see the exact regulatory issues before proposing remedies for them.

The committee declined to comment. Google, the world’s leading seller of online ads ahead of Facebook and Instagram owner Meta Platforms Inc (META.O), had no immediate comment.

The Heart of Google’s Business Model

Dieter Paemen, a partner at law firm Clifford Chance, said the case goes to the heart of Google’s ad-driven business model, affecting advertisers, publishers, ad tech providers and users, among others.

“It’s been a long time — advertisers and publishers have been vocal about Google’s ad tech practices for years. Google operates on multiple sides of the ad deal and provides publishers and advertisers with the original deal,” he said. Say.

Google’s dominance in online advertising has been increasingly questioned over the past few years. Complaints by competitors of its alleged anti-competitive conduct have led to antitrust investigations into its conduct on five continents.

Google’s advertising business generated nearly $111 billion in sales in the first half of the year. Analysts expect Google’s ad sales to hit $233 billion this year, up about 11 percent from a year ago, according to Refinitiv estimates.

Google’s advertising business includes many parts, but search advertising leads the way in terms of revenue. Other aspects include selling ads on external partner websites and apps, as well as selling ads on YouTube, Gmail, and other internal services.

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Reporting by Foo Yun Chee, additional reporting by Paresh Dave in Oakland, Calif.; Editing by Susan Fenton, David Evans and David Gregorio

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