Google’s Bid to End EU Antitrust Case with AdX Sale Rejected by Publishers

Alphabet’s Google has made an unprecedented move in 2023, proposing to sell its advertising marketplace, AdX, in a bid to resolve an ongoing European Union antitrust investigation. However, the proposal was swiftly rejected by European publishers, according to sources familiar with the situation, Reuters reported on Wednesday.

The rejection is a significant development in the EU’s scrutiny of Google’s ad tech business, which has been under investigation since last year following a complaint from the European Publishers Council. The European Commission, the EU’s executive arm, accused Google of favoring its own advertising services, marking the fourth antitrust case the commission has opened against the search engine giant.

According to Reuters, this marks the first time Google has offered to sell an asset as part of an antitrust settlement. However, this concession was not enough for publishers, who argue that simply selling AdX would not adequately resolve concerns about the tech giant’s dominance in the digital advertising sector. The publishers are calling for Google to divest additional assets, citing conflicts of interest arising from Google’s involvement in nearly every level of the ad tech supply chain.

Google’s AdX, or Ad Exchange, is a digital marketplace where publishers can sell their unsold ad space to advertisers in real-time. Margrethe Vestager, the EU’s antitrust chief, had previously suggested that Google divest its sell-side tools, including AdX and DoubleClick for Publishers (DFP), to mitigate these conflicts of interest.

Read more: Google Wins Appeal Against EU’s €1.5 Billion Fine for Ad Monopoly Practices

A Google spokesperson, addressing the situation, stated, “As we have said before, the European Commission’s case about our third-party display advertising products rests on flawed interpretations of the ad-tech sector, which is fiercely competitive and rapidly evolving. We remain committed to this business,” Reuters reported. Meanwhile, the European Commission has declined to comment on the matter, and the European Publishers Council has yet to respond to requests for comment.

Despite the publishers’ rejection of Google’s offer, sources familiar with the case told Reuters that the Commission may not immediately push for Google to divest any assets. Instead, it may focus on ordering the company to cease its allegedly anti-competitive practices in the coming months. However, should Google fail to comply with this potential ruling, a divestment order could follow at a later stage.

Google’s advertising operations are a core part of its business. In 2023, the company’s advertising revenue, which includes income from services such as Google Search, Gmail, YouTube, and Google Ad Manager, amounted to $237.85 billion, accounting for 77% of its total revenue, according to Reuters. This dominance has made Google the world’s leading digital-advertising platform, a status that has drawn the attention of regulators globally.

Source: Reuters