Google Said to Offer Settlement for EU Probe Into Digital Advertising

Alphabet unit Google is seeking to settle an EU antitrust investigation into its digital advertising business, a person familiar with the matter said, a move that could help it stave off a disruptive, lengthy probe and a possible hefty fine.

EU antitrust cases have cost Google more than EUR 8 billion (roughly Rs. 69,160 crores) in fines in three different cases in the last decade and it has also been ordered to change its business practices to allow rivals to compete.

The European Commission opened an investigation in June into whether Google favours its own online display advertising technology services to the detriment of rivals, advertisers, and online publishers.

Google has made a proposal to the Commission, the person said, declining to provide details because of the sensitivity of the matter.

The Commission, which acts as the competition enforcer for the 27-country bloc, declined to comment.

Google, which will face off with the enforcer at a 5-day court hearing next week over its record EUR-4.34-billion (roughly Rs. 37,530 crores) fine related to its Android mobile operating system, did not respond to Reuters' requests for comment.

It remains to be seen whether European antitrust chief Margrethe Vestager is open to settlement talks which typically take months or even years before any agreement can be reached or they could stall mid-way.

She has in her last three Google cases preferred sanctions instead of negotiating a solution. A settlement decision would include no fine and no finding of wrongdoing.

Google could face a fine up to 10 percent of its global turnover amounting to $18.2 billion (roughly Rs. 1,57,370 crores) based on last year's revenue if found guilty of breaching EU antitrust rules.

Regulators will examine whether Google restricts third party access to user data for advertising purposes on websites and apps, while keeping such data for its own use.

The company's plan to remove browser cookies and also to stop tracking Android users via a tool known as an advertising identifier will also come under scrutiny.

Last year, Google made $147 billion (roughly Rs. 10,82,970 crores) in revenue from online advertisements, more than any other company in the world, with ads including search, YouTube and Gmail accounting for the bulk of its overall sales and profits.

About 16 percent of its revenue came from the company's display or network business, in which other media companies use Google technology to sell ads on their website and apps.

Research company eMarketer estimated Google will capture 30 percent of the global Internet advertising market this year while increasing sales by 18 percent to $117 billion (roughly Rs. 8,61,960 crores).

Trials in US advertising cases brought against Google by state and federal governments as well as several private companies are not expected to begin for at least two more years.

Google has also sought to settle another advertising probe recently. In June, it pledged to work closely with the UK Competition and Markets Authority on the company's plan to remove tracking cookies from the Chrome browser because the move raised antitrust concerns from the advertising industry.

The regulator is currently weighing whether to accept Google's concessions.

The United States and the EU are looking to work more closely in regulating Big Tech at a summit next week.

© Thomson Reuters 2021