Google's ads business violates antitrust laws, should break up, EU says

Earlier this year, the U.S. Department of Justice sued Google for breaking antitrust laws with its advertising business. Now, Google is facing the same challenge overseas in the EU as well.

On Wednesday, the European Commission charged Google with violating EU antritrust laws regarding its advertising business. The central issue, according to the EU, is that Google is basically on every side of the advertising network, as buyer and seller on its own platform where the company sets its rules. This provides Google with an unfair anti-competitive advantage, which the EU says violates its antitrust laws.

"Google has a very strong market position in the online advertising technology sector. It collects users’ data, it sells advertising space, and it acts as an online advertising intermediary. So Google is present at almost all levels of the so-called adtech supply chain," said the EU Commission Executive Vice-President in charge of competition policy, Margrethe Vestager in a statement.

"Our preliminary concern is that Google may have used its market position to favour its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs. If confirmed, Google’s practices would be illegal under our competition rules."

Google and its parent company, Alphabet, has been hit with antitrust violations before regarding its search engine and Android mobile operating system. However, the current antitrust charges from both the U.S. and now the EU hit the company a bit differently. Google's ad business accounts for the majority of its nearly $60 billion in profit last year.

Along with forcing Google to break up with its ad business, the EU can also impose a fine of 10 percent of Alphabet's annual global turnover.

Google now has the opportunity to defend itself against the claims made by the European Commission.

“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” said Google vice president of global ads Dan Taylor in a statement. “Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector.”