Already attacked many times on our continent, the American giant is hit hard by a new antitrust complaint, threatening its most important activity a little more.
Advertising is at the heart of the web economy. It is essential, so many sites, platforms and creators depend on the income it generates to survive, in whole or in part. In this area, Google is a major player. Perhaps even a little too much, to the point that the European Union is (again) sounding the alarm.
A giant too… big?
This time it is Margrethe Vestager, Executive Vice-President of the European Commission, who plays the role of the bad cop. At a press conference this week, she announced that Google was the subject of a new antitrust complaint from EU regulators. The Mountain View company is suspected of having illegally consolidated its dominant position in the online advertising market.
Google is a major player in the industry, generating 80% of its revenue from it in 2022. This colossal percentage is explained by its dominant position in all segments of the activity. Indeed, the American giant operates the main purchase, sale and exchange platforms, as well as its own advertising spaces through YouTube or Google Search.
For Margrethe Vestager, this quasi-monopoly that the company has gives it an unfair advantage over the competition. ” There’s nothing wrong with being dominant as such she says. ” What our investigation has shown is that Google appears to have abused its market position. According to her, the company can afford to promote its own system illegally, thus forcing customers to use it almost systematically. As a result, the Mountain View firm manages to capture 35% of every dollar spent on digital advertising worldwide.
And if, in public, the giant plays the innocent, behind the scenes, the tone is different. Indeed, in an internal memo sent in 2016, a company executive is concerned: ” Is there a deep problem in the fact that we own the platform, the exchange and a huge network? The analogy would be that Goldman or Citibank owns the New York stock market. When it comes to that, there’s a big problem somewhere.
Standard Oil 3.0
Google cannot ignore that the situation can last for a very long time. In recent years, the company has already been forced to pay $8.6 billion in fines in several EU antitrust complaints. This latest procedure is yet another blow, not to mention the fact that it comes on top of two other complaints filed recently in the United States, one by a coalition of attorneys general, the other by the federal government itself.
Things are looking bad for the Mountain View company, and some will certainly guess what the United States and the European Union are starting to have in mind: a split of the company. This would put an end to its dominant position by dividing its market shares into several entities. And Google would more or less agree, but on its own terms.
Indeed, the firm has hinted that it would be ready to proceed with an internal split, separating the advertising activities of Google while keeping them under the ownership of Alphabet, its parent company which recorded rather satisfactory advertising revenues at the end of 2022. The idea would then be to set up a sort of safeguard to prevent self-serving transactions between the different structures.
But that wouldn’t be enough for bad cop Vestager, who smells a new trick: ” We’ve seen it before: each time a practice is spotted by the industry, Google subtly changes its behavior to make it harder to identify. she says. ” If the Commission concludes that Google acted illegally, it could require the company to spin off part of its business. »
Source : Gizmodo
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