EU antitrust authorities are finally taking a broad and deep look into Google’s adtech stack and role in the online ad market — confirming today that they’ve opened a formal investigation. Google has already been subject to three enforcement over the past five years — Google Shopping (2017), Android (2018), and AdSense (2019).
But the European Commission has avoided officially entering the broader issue of its role in the adtech supply chain. (The AdSense investigation focused on ad brokering business, though Google claims the latest probe represents the next stage of that 2019 inquiry rather than stemming from a new complaint).
The Commission said that the newwould assess whether it has violated EU competition rules by “favoring its online display advertising technology services in the so-called ‘ad tech’ supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers”. Display advertising spending in the EU in 2019 was estimated to be approximately €20BN, per the Commission.
“The formalGoogle is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps while reserving such data for its use,” it added in a press release.
Earlier this, France’s competition watchdog fined Google $268M in a case related to self-preferencing within the adtech market — which the watchdog found constituted an abuse by Google of a dominant position for ad servers for website publishers and mobile apps.
In that instance, Google sought a settlement — proposing several binding interoperability agreements, which the watchdog accepted. So it remains to be seen whether the may seek to push for a similar outcome at the EU level.
There is one cautionary signal in that respect in the Commission’s press release, which makes a point of flagging up EU data protection rules — andto consider the protection of “user privacy”.
That’s an exciting side-note for the EU’s antitrust division to include, given some of the criticism that France’suser exploitation (in the form of adtech privacy violations) into the sought-for online advertising market rebalancing.
Or, as Cory Doctorow neatly explains in this Twitter thread: “The last thing we want is competition in practices that harm the public.” Aka, unless competition authorities wise up to the data abuses being perpetuated by dominant tech platforms — such as through enlightened competition authorities engaging in close joint-working with privacy regulators (in the EU this is, at least, possible since there’s a regulation in both areas) — there’s a genuine risk that antitrust enforcement against Big (ad) Tech could supercharge the user-hostile privacy abuses that surveillance giants have only been able to get away with because of their market muscle.
So, tl;dr, ill-thought-through antitrust enforcement risks further eroding. (Unless you’re Google, it will represent successfully playing one regulator off against another at the expense of users.)
The need for competition and privacy regulators to work together to purgemarket abuses has become an active debate in Europe — where a few pioneering regulators (like Germany’s FCO) are ahead of the pack.
The UK’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO) also recently put out a joint statement — laying out their conviction that antitrust and data protectionthat’s healthy across all dimensions — i.e., for competitors, yes, but also for consumers.
A recent CMA proposed settlement related to— aka ‘Privacy Sandbox’, which has also been the target of antitrust complaints by publishers — was notable in baking in privacy commitments and data protection oversight by the ICO in addition to the CMA carrying out its competition enforcement role.
It’s fair to say that the European Commission has lagged behind such pioneers in appreciating the need for synergistic regulatory joint-working, with the EU’s antitrust chief roundly ignoring — for example — calls to block Google’s acquisition of Fitbit over the data advantage it would entrench, in favor of accepting a few ‘concessions’ to waive the deal through.
So it’s interesting to see the EU’s antitrust division here and now — at the very least — virtue-signaling an awareness of the problem of regional regulators approaching competition and privacy as if they exist in firewalled silos.
Whether this augurs the kind of enlightened regulatory joint working to achieve holistically healthy and dynamicwill undoubtedly be essential if the EU effectively grapples with surveillance capitalism remains to be seen. But we can at least say that the inclusion of the below statement in an EU antitrust division press release represents a change of tone (and that, in itself, looks like a step forward…):
“Competition law and data protection laws must work hand in hand to ensure that display advertising markets operate on ain which all market participants protect user privacy in the same manner.” Returning to the specifics of the EU’s Google adtech probe, the Commission says it will be particularly examining:
- The obligation to use Google’s services Display & Video 360 (‘DV360′) and Google Ads to display advertisements on YouTube.
- The obligation to use Google Ad Manager to serve online display advertisements on YouTube and potential restrictions placed by Google on how services competing with Google Ad Manager can serve online display advertisements on YouTube.
- The apparent favoring of Google’s ad exchange “AdX” by DV360 and Google Ads and the potential selecting of DV360 and Google Ads by AdX.
- The restrictions Google places on the ability of , such as advertisers, publishers, or competing online display advertising intermediaries, to access data about user identity or user behavior available to Google’s advertising intermediation services, including the Doubleclick ID.
- plans to prohibit the placement of third-party ‘cookies’ on Chrome and replace them with the “Privacy Sandbox” set of tools, including the effects on online display advertising and online display advertising intermediation markets.
- plans to stop making the advertising identifier available to third parties on Android intelligent mobile devices when a user opts out of personalized advertising, and the effects on online display advertising and intermediation markets.
Commenting on the investigation in a statement, Commission EVP and competition chief Margrethe Vestager added: “Online advertising services are at the heart of howmonetize their online services. Google for targeted advertising purposes; it sells advertising space and acts as an online advertising intermediary.
So Google is present at almost all levels of the supply chain for online display advertising. We are concerned that Google has made competing in the ad tech stack harder for rival online advertising services. A is of the essence for everyone in the supply chain.
Contacted for comment on the Commission investigation, a Google spokesperson sent us this statement: fair competition is essential for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers to generate revenues and funding for content. We will also be looking at user tracking policies to ensure they are in line with fair competition.”
“Thousands of European businesses use our advertising products to reach new customers and fund their websites daily. They choose them because they’re competitive and effective. We will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers.”
Google also claimed that publishers keep around 70% of the revenue when using its products, saying it can be more in some instances. It also suggested that publishers and advertisers often use multiple technologies simultaneously, claiming that it builds its technologies to be interoperable with more than 700 rival platforms for advertisers and 80 rival publishers.