Just days after securing a major antitrust win in the US, Google has been slapped with a hefty penalty in an investigation by the European Union (EU) of the search giant’s digital advertising services.
Google has been ordered to pay a 2.95 billion euro ($3.5 billion) fine for violating the EU’s antitrust laws by favouring its own adtech services, according to a press release by the European Commission, the 27-nation bloc’s executive branch and top antitrust enforcer, on Friday, September 5.
The European Commission has further directed Google to end its “self-preferencing practices”. The company has 60 days to propose steps to stop “its inherent conflicts of interest” along the adtech supply chain. “Today’s decision shows that Google abused its dominant position in adtech, harming publishers, advertisers, and consumers. This behaviour is illegal under EU antitrust rules. Google must now come forward with a serious remedy to address its conflicts of interest, and if it fails to do so, we will not hesitate to impose strong remedies,” Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, said in a statement.
This is the fourth time that Google has been sanctioned by EU regulators with a multibillion-euro fine in an antitrust case. While most of the previous EU antitrust cases against Google have ended in fines and requirements, officials are reportedly frustrated that these have not succeeded in stopping Google from engaging in anti-competitive behaviour. For instance, the latest 2.95 billion euro fine may seem significant but is relatively modest considering that Google earned $28.2 billion in revenue in the second quarter of this year.
As a result, top EU officials have said in the past that the only way to satisfy antitrust concerns about Google’s lucrative digital ad business is to break up the tech giant and sell off parts of its business.
Meanwhile, Google has said it will appeal the Commission’s fine in the adtech antitrust probe. “It imposes an unjustified fine and requires changes that will hurt thousands of European businesses by making it harder for them to make money,” Lee-Anne Mulholland, Google’s global head of regulatory affairs, said in a statement. “There’s nothing anticompetitive in providing services for ad buyers and sellers, and there are more alternatives to our services than ever before,” she added.
Let’s take a closer look at Google’s adtech services, the European Commission’s conclusions, what they mean for EU-US relations, and other key takeaways.
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How does online advertising work?
Online display ads are banners and text that appear on websites and are personalised based on an internet user’s browsing history. Showing internet users display ads relies on three primary ad tech tools: Ad servers, ad marketplaces like exchanges and networks, and ad buying tools.
Ad servers help publishers such as news websites and blogs sell ad spaces to advertisers either directly (by making deals with large advertisers) or indirectly (through ad exchanges) or both. Google’s leading ad server tool is called DoubleClick For Publishers (DFP).
Ad buying tools essentially let advertisers buy the display ad slots being sold by publishers. Large brands such as Ford and Nike use a specific type of ad buying tool known as demand-side platforms (DSPs) which offer more complex bidding and trading options while requiring high minimum monthly spend commitments. Google’s DSP is referred to as DV360 or DoubleClick Bid Manager (DBM).
Finally, ad marketplaces are where buyers (advertisers) and sellers (publishers) of display ads are matched. Google’s ad exchange platform is called AdX accessible through Google Ad Manager (GAM). The company’s advertiser-facing ad network is known as Google Ads (formerly AdWords) and its publisher-facing ad network is known as Google Ad Sense.
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All of these products in the ad tech stack work together to place advertisers’ ads on publishers’ websites. This entire process not only occurs in a matter of seconds but also takes place billions of times every day across the Internet.
What did the European Commission find?
The European Commission opened an investigation into Google’s adtech services in 2021. It has found that since 2014, Google illegally abused its dominant position in the adtech ecosystem.
“Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets,” the Commission said.
Specifically, the Commission found that Google has violated Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area ‘EEA) Agreement that prohibits the abuse of a dominant position.
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On how Google abused its power, the Commission said that the company favoured its own adtech services “to the detriment of competing providers of advertising technology services…” As a result of Google’s illegal practices, advertisers face higher marketing costs that they are likely to pass on to consumers in the region.
At the same time, it also meant lower revenue for publishers, like news sites, which might have resulted in lower quality and higher subscription costs for consumers.
What next?
The European Commission’s latest move to crack down on big tech companies like Google has drawn outrage from US President Donald Trump. He said that the EU’s fine on Google is “effectively taking money that would otherwise go to American Investments and Jobs.”
“Very unfair, and the American Taxpayer will not stand for it!” Trump said in a post on Truth Social. “As I have said before, my Administration will NOT allow these discriminatory actions to stand,” he added.
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However, Google is facing a potential breakup of its advertising business in the US as well. In April this year, a US court found Google guilty of violating antitrust law over its technology to connect online advertisers and publishers. The case is now expected to move to the remedies phase, where Judge Leonie Brinkema of the US district court of Virginia will hear from Google and the US Department of Justice (DOJ) on the most appropriate ways to restore competition in the ad server and ad exchange markets that have been illegally monopolised by Google.
But the company is also coming off a major legal victory after a US district court ruled last week that Google does not have to spin out its popular Chrome web browser as initially proposed by the DOJ in another online search antitrust case that the company lost in 2024. p
(With inputs from Associated Press.)
