EU is now investigating Google’s adtech over antitrust concerns – TechCrunch

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 major EU antitrust 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 Google’s search 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 new Google antitrust investigation would 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 approximate €20BN, per the Commission. “The formal investigation will notably examine whether Google 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 month, 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 tech giant 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 — and highlighting the need to consider the protection of “user privacy”.

That’s an interesting side-note for the EU’s antitrust division to include, given some of the criticism that France’s Google adtech settlement has attracted — for risking cementing abusive user 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 very real 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 web users’ rights… and that would be a terrible outcome. (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 purge Big Tech market abuses has become an active debate in Europe — where a few pioneering regulators (like German’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 protection regulators must work together to foster a thriving digital economy that’s healthy across all dimensions — i.e., for competitors, yes, but also for consumers.

A recent CMA proposed settlement related to Google’s planned replacement for tracking cookies — 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 dynamic digital markets — which will certainly be essential if the EU is to grapple with surveillance capitalism very much effectively 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…): 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 purchase online display advertisements on YouTube.
• The obligation to use Google Ad Manager to serve online advertisements on YouTube and potential restrictions Google places on competing with Google Ad Manager can scan display advertisements on YouTube.
• The apparent favoring of Google’s ad exchange “AdX” by DV360 and Google Ads and the potential favoring of DV360 and Google Ads by AdX.
• The restrictions Google places on the ability of third parties, 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.
• Google announced 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.
• Google announced plans to stop making the advertising identifier available to third parties on Android smart mobile devices when a user opts out of personalized advertising, and the effects on online display advertising and online display advertising intermediation markets.

Commenting on the investigation in a statement, Commission EVP and competition chief Margrethe Vestager added: Contacted for comment on the Commission investigation, a Google spokesperson sent us this statement: 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 platforms for publishers.