Google Gets Two EU Directives Over Online Ad Practices

Google is coming under fire by the European Union, which contends the Internet giant is abusing its power in the digital advertising space.

In two directives from EU Competition Commissioner Margrethe Vestager on Thursday (July 14), the EU said Google has abused its dominant position in the digital ad space by favoring its own comparison shopping service in its search results. What’s more, the commission also informed Google that, in its preliminary view, the company abused its position in online advertising by restricting the possibility of third-party websites to display search ads from competitors of Google.

“Google has come up with many innovative products that have made a difference to our lives. But that doesn’t give Google the right to deny other companies the chance to compete and innovate,” said Vestager in the directives. “Today, we have further strengthened our case that Google has unduly favored its own comparison shopping service in its general search result pages. It means consumers may not see the most relevant results to their search queries. We have also raised concerns that Google has hindered competition by limiting the ability of its competitors to place search adverts on third-party websites, which stifles consumer choice and innovation.”

According to the commission, Google has been given the opportunity to respond to the concerns in both directives. Vestager said she will consider the arguments from Google in both cases carefully, but if investigations into Google’s ad practices show Google broke EU antitrust rules, the commission “has a duty to act to protect European consumers and fair competition on European markets.”

In the case of the comparison shopping complaint, the EU issued a statement of objections in 2015 and received response from Google in September of last year. Since then, the commission completed more inquires, and the directives on Thursday provide details of additional evidence that supports its preliminary conclusion that Google abused its position by “systematically” favoring its own comparison shopping service. As for third parties using competitors’ ads, the commission found in its preliminary investigation that Google has embraced practices that let it protect its position in online search advertising by preventing existing and new customers from getting into the online search advertising market.