Google Ad Business Under Scrutiny as EU Said to Revive Probe

Google Ad Business Under Scrutiny as EU Said to Revive Probe

  • EU officials quizzed firms involved in advertising market
  • Escalation comes as Google CEO Pichai set to meet with EU

The European Union is reviving a probe into Google’s advertising practices with an inquiry that adds to active EU antitrust investigations into the company’s mobile operating system and shopping search services.

The EU has been quizzing companies involved in online advertising in recent weeks about Google’s behavior, according to three people with knowledge of the investigation who asked not to be named because the process is confidential. Officials are seeking data that may be used to build a so-called statement of objections listing areas where they suspect Google breaches antitrust rules, they said.

Google’s $1 billion payment to Apple Inc. to keep its search bar on the iPhone is one of the kind of exclusivity agreements regulators are looking at, one of the people said. The EU move rekindles part of a probe they first announced in 2010 into contracts with websites that shut out non-Google advertising services and deals with computer and software vendors that prevent them using other search tools.

Key Driver

Most of Google’s $74.5 billion 2015 revenue came from advertising. Its targeted ad service AdWords, which displays promotions alongside query results and web content has been a key driver in helping Google grow its sales.

Al Verney, a spokesman for Alphabet Inc.’sGoogle, and European Commission officials in Brussels declined to comment. Tanya Ridd, an Apple spokeswoman in London, didn’t respond to a call and an e-mail.

The opening of a new front against Google comes as Chief Executive Officer Sundar Pichai meets for the first time with Competition Commissioner Margrethe Vestager this week amid a growing list of EU woes for the Mountain View, California-based company.

Formal Complaint

The commission’s patience with Google snapped last April after three settlement bids failed to satisfy critics. Vestager fired off a formal complaint threatening fines and enforced changes to the way search results are displayed. Google was accused of “systematically favoring its own comparison shopping product in its general search results pages.”

Vestager has said her first statement of objections to Google could provide a template for more cases in areas such as mapping or travel services.

Her team at the EU commission is working intensively on another complaint targeting Google’s Android mobile operating system. That investigation is examining Google’s agreements with smartphone and tablet makers that require them to install Google’s apps on devices.

In addition, regulators have been looking at claims that the company also favors its own maps and travel services over others.

Vestager said last month she’s ready to examine Google’s tax deals with the U.K., building on cases she already has on Apple’s tax agreements with Ireland and Inc.’s pacts with Luxembourg. Investigating tax structures that give multinational companies an unfair advantage over smaller rivals is one of her priorities.

Under EU state-aid rules, the commission can order countries to claw back any unfair tax advantages conferred to companies.