European Union competition authorities have initiated a new investigation into Google's operations in online advertising, focusing on claims that the company may be manipulating auction outcomes to boost the prices advertisers pay.
According to information circulated to market participants, the Commission issued a formal letter on February 9 to businesses that could be affected, flagging concerns that Google might be "artificially increasing the clearing price" for ads bought through its search platform. The Commission has also sought additional information from participants across several online advertising markets to better understand Google's market position and practices.
EU regulators said the alleged behaviour could constitute a breach of the bloc's competition rules. Under those rules, confirmed violations of antitrust provisions may result in fines up to 10% of a company's global annual sales. The inquiry is described as being at an early stage while investigators gather facts and responses from the parties contacted.
Competition Commissioner Teresa Ribera has been identified by sources familiar with the matter as the official who may publicly announce the probe in the near term, though no formal public announcement had been made at the time the Commission began its outreach to market participants.
This action builds on a history of regulatory scrutiny for Google in Europe. The company has previously faced large antitrust penalties from EU authorities, with earlier enforcement measures resulting in fines running into the billions of euros.
At present, the investigation centers on the specific allegation that auction mechanics within Google's search advertising system could be raising the clearing price - the amount advertisers ultimately pay - potentially harming advertisers who bid for placements. Because the inquiry remains nascent, regulators are in the process of collecting documents and statements from affected market actors to determine whether formal charges will follow.
Summary
EU competition regulators have opened an early-stage probe into alleged practices by Google that may inflate search-ad auction clearing prices. The Commission sent letters to potentially impacted firms on February 9 and has requested market information across multiple online advertising segments. If wrongdoing is found, the company could face fines up to 10% of global annual sales. Competition Commissioner Teresa Ribera may announce the probe formally.
Key points
- Regulators sent a letter on February 9 to businesses potentially affected by Google's alleged conduct.
- The European Commission is investigating claims that Google may be "artificially increasing the clearing price" in search ad auctions.
- The inquiry touches multiple online advertising markets and may lead to significant fines if competition breaches are proven.
Risks and uncertainties
- The probe is in its early stages, so outcomes are uncertain - regulators are still collecting information from market participants.
- If the allegations are substantiated, the company could face fines up to 10% of global annual sales, creating financial and operational risk for the digital advertising sector.
- The investigation adds to existing legal exposure in Europe, where the company has previously incurred antitrust penalties amounting to billions of euros, heightening regulatory uncertainty for advertisers and ad-tech firms.