The EU will probe under the Digital Markets Act (DMA) to examine claims that Google downranks publishers with sponsored content.
- The DMA grants the EU broad authority over major digital gatekeepers such as Google, Apple, and Amazon
- The inquiry adds to Google’s mounting scrutiny in Europe, where regulators have already issued multiple penalties over alleged market abuses.
- In September, the European Commission fined Google €2.95 billion ($3.42 billion) for distorting competition in the adtech sector.
Alphabet Inc.’s Google (GOOG, GOOGL) is facing renewed regulatory pressure in Europe, with the European Commission preparing to open an investigation into how the company ranks news publishers in its search results, according to the Financial Times.
The probe, which falls under the European Union’s (EU) new Digital Markets Act (DMA), will examine allegations that Google demoted publishers featuring paid or sponsored content in its search rankings.
Scrutiny In Europe
The inquiry adds to Google’s mounting scrutiny in Europe, where regulators have already issued multiple penalties over alleged market abuses. The DMA grants the EU broad authority over major digital “gatekeepers” such as Google, Apple, Amazon, Meta, and Microsoft, requiring them to treat business users and rivals fairly.
Google has been subject to numerous antitrust investigations globally, examining whether it has abused its dominance in search, advertising, and mobile ecosystems.
Antitrust Issues
In September, the European Commission fined Google €2.95 billion ($3.42 billion) for distorting competition in the advertising technology (adtech) sector. Regulators found that Google favored its own ad exchange, AdX, by giving it advance information about rival bids and prioritizing it through its ad-buying tools, Google Ads and DV360. The Commission concluded that these self-preferencing practices unfairly strengthened Google’s market dominance and limited competition.
The Commission signaled that structural remedies, including a possible divestment of part of Google’s ad business, might be necessary if behavioral changes fail to resolve the issues.
Google’s advertising network remains its primary source of revenue, connecting advertisers with publishers through its suite of digital tools.
Google had also been embroiled in an antitrust lawsuit in the U.S. The Justice Department was looking to force Google to sell parts of its ad business, arguing a breakup is the only effective solution. However, earlier this year, U.S. District Court for the District of Columbia Judge Amit Mehta accepted only parts of the DOJ’s proposed remedies, prohibiting exclusive contracts but allowing Google to retain its major search default deal with Apple and keep its Chrome browser.
The stock was down 1.6% on Wednesday but has gained nearly 50% year-to-date.
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