Google might have to break up its digital ad business

The EU Commission charged Google with antitrust violations. If Google loses their case, they will be forced to sell part of their advertising business.

European Commission Vice President Margrethe Vestager says Google is dominant on both sides of the ad-selling market. Google abused that position by favoring its own ad exchange, reinforcing its ability to charge a high fee for its services, the commission said.

“only the mandatory divestment by Google of part of its services” would address the concerns.


The press release does a better job of explaining the issue. In part:

[M]any advertisers and publishers rely on intermediaries. Intermediaries that can bring them together. Some of those intermediaries act on behalf of the advertisers. Others act for the publishers of websites and apps. Then, there are the so-called “ad exchanges”, in essence market places where supply and demand meet in real time.

Google offers all of those different services.

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Addressing the core business model is the only way to effectively address the monopoly, so after a few botched attempts the EU might be on the right track. Whether you agree with that or not, Google should not be on the buy side and the sell side. And to run the exchange!

I hav every good reasons to believe that this effort is more international than the EU statement suggests. AFAIK the main credit goes to Dina Srinivasan for her incredibly detailed investigations as detailed in her paper Why Google Dominates Advertising Markets.

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Breaking up the ad business is a good start, but they need to also break up Google’s control of Android, Chrome browser, the search engine and more.

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