The European Commission today said it has begun investigating Google for “possible anticompetitive conduct” in the market for online advertising technology.
The EC announcement said the formal antitrust investigation will “assess whether Google has violated EU competition rules by favoring its own 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.” The EC said it will “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 own use.”
Chrome and Android figure into the investigation. The EC said it will investigate “Google’s 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’s Privacy Sandbox is also called FLoC, for Federated Learning of Cohorts.
Regarding Android, the EC said it will examine “Google’s 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.” The EC said it will also probe Google-imposed requirements that force advertisers to use certain Google services in order to purchase ads on YouTube.
Google dominates supply chain, Vestager says
Noting that “Google is present at almost all levels of the supply chain for online display advertising,” EC Commissioner Margrethe Vestager said the European government is “concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.” Vestager is the EC’s executive vice president in charge of competition policy.
Vestager said the investigation will look into “Google’s policies on user tracking to make sure they are in line with fair competition.” She said that “Google collects data to be used for targeted advertising purposes, it sells advertising space, and also acts as an online advertising intermediary.”
Google defended its practices in a statement sent to Ars and other news organizations. “Thousands of European businesses use our advertising products to reach new customers and fund their websites every single day,” Google said. “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’s FLoC controversy
FloC has been criticized by groups concerned about user privacy, such as the Electronic Frontier Foundation. Rival browser-makers don’t like it, either, as Firefox-maker Mozilla told The Verge recently: “We don’t buy into the assumption that the industry needs billions of data points about people, that are collected and shared without their understanding, to serve relevant advertising.” Browser-maker Brave said that “the worst aspect of FLoC is that it materially harms user privacy, under the guise of being privacy-friendly.”
Google has said it developed the Privacy Sandbox in order to replace third-party cookies “with viable privacy-first alternatives, developed alongside ecosystem partners, that will help publishers and advertisers succeed while also protecting people’s privacy as they move across the web.” Google argues that its planned system is more protective of user privacy than current methods because it tracks groups of people instead of individual users.
As we wrote in January 2020, the planned system “uses browser-based machine learning and other techniques to determine user interests and aggregate them with other users.” Google could roll out the new system and drop Chrome support for tracking cookies by 2022.
We covered Google’s planned Android change earlier this month. It would start rolling out late in 2021 and, when users opt out of personalized ads, will show apps “a string of zeros” instead of the user’s advertising ID.
Practices “may breach EU competition rules”
The EC today said that “Google provides several advertising technology services that intermediate between advertisers and publishers in order to display ads on websites or mobile apps” and that the investigation will focus on display advertising. Besides the Chrome and Android portions mentioned earlier, the specific Google practices that the EC said it will investigate are as follows:
- The obligation to use Google’s services Display & Video 360 (‘DV360’) and/or Google Ads to purchase online 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 the way in which services competing with Google Ad Manager are able to serve online display advertisements on YouTube
- The apparent favoring of Google’s ad exchange “AdX” by DV360 and/or Google Ads and the potential favoring of DV360 and/or Google Ads by AdX
- The restrictions placed by Google 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 which is available to Google’s own advertising intermediation services, including the DoubleClick ID
“If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies,” the announcement said.
Previous fines totaled $9.5 billion
The EC previously fined Google $2.7 billion in 2017 for abusing its search dominance “by giving an illegal advantage to another Google product, its comparison shopping service”; $5.1 billion in 2018 for “impos[ing] illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general Internet search”; and $1.69 billion in 2019 for “imposing a number of restrictive clauses in contracts with third-party websites which prevented Google’s rivals from placing their search adverts on these websites.”
The EC and Google have fought for years over Android’s default search engine. Google was forced to offer a “ballot” that lets users pick a search engine from a list, but the company initially charged its competitors for the right to appear on that list. Google this month finally agreed to make the ballot “free for eligible search providers.”