Paying a 2.95 billion euro bill is the least of Google’s problems. Managing demands from the world’s two foremost antitrust regulators that it sell off a slice of its lucrative adtech business is the real challenge. The European Commission’s split move today to call for an asset sale — but pull up short of legally ordering that — means it can align itself with US regulators just as an American judge mulls the appropriate remedies for Google.
It was a long wait for the EU’s antitrust verdict on Google’s adtech business. But now the rationale behind the timing is clear: Going public this week allowed the bloc’s regulator to align closely with parallel litigation playing out in an American courtroom. While the European Commission extracted 2.95 billion euros ($3.5 billion) in fines today, the real fight will be over whether Google has to sell off a business (see here).
By expressing a preference but not imposing a solution, the EU regulator has ensured it has skin in the game when the court battle starts later this month.
Earlier this year, a US judge ruled that Google’s online advertising business breached US law banning monopolization. Today, the EU antitrust watchdog found the search giant’s adtech business to be in violation of EU dominance law.
The crime has been certified. Now the debate on both sides of the Atlantic turns to how Google can rectify its mis-demeanor.
A US trial on that very question is set to begin later this month. And by November, the US tech giant must submit its remedy plans to EU enforcers.
But investigators, rivals and the company’s numerous critics won’t have to wait long for a foretaste: As soon as this evening, Google and US regulators will publish their proposed fixes, in preparation for their next round of US litigation.
— Structural remedy —
The fine, which saw a 60 percent uptick for recidivism, came out higher than many expected in these times of fraught geopolitical tensions.
Admittedly, it did not include an explicit order forcing Google to sell off a business unit, but that prospect is explicitly on the table. "At this stage, it appears that the only way for Google to end its conflict of interest effectively is with a structural remedy, such as selling some part of its adtech business," said EU antitrust boss Teresa Ribera today (see here).
Forcing Google to sell Google Ad Manager would be unprecedented, and so the commission believes the company should first have the chance to propose an alternative.
That appears a little disingenuous. Google already had the chance to propose other remedies after receiving the formal chargesheet. And it did suggest a sale of its AdX exchange, which the regulator refused.
The reality is that it is very hard for the commission to order the break-up of a company — not least a US tech champion, and not least with President Donald Trump in the White House.
But slotting into the slipstream of the US antitrust litigation means it can support just such a solution and benefit from its outcome — without having to swing the ax on its own.
— Extreme devastation —
Today, Google and the US Department of Justice are expected to set out what changes they think would address the adtech problem. A trial to determine the remedies starts on Sept. 22 and the EU antitrust boss will meet with her US counterpart days before when she travels to New York.
Google's AdTech services are global and both regulators and the company have an interest in a single solution, rather than a patchwork of tweaks.
The European Commission’s preference is for the sale of Google Ad Manager, which includes AdX and its publisher ad server DoubleClick for Publishers, or DFP. The Department of Justice is pushing for just such an outcome and has fleshed out its proposal in more detail: the immediate sale of AdX and a phased three-stage divestment of DFP.
In May, Google told the US District Court that such a proposal would cause "extreme devastation" to the AdTech market, and it said then that a more limited set of behavioral remedies would be enough (see here). That is unlikely to have changed in the meantime.
— Ticking clock —
EU antitrust boss Ribera said today she hopes “Google puts in place an effective remedy on both sides of the Atlantic to address its inherent conflicts of interest in this business.”
A joint outcome was, she said, “everyone's interest .... including for Google itself, and for citizens worldwide.”
The search giant, which today vowed to appeal the fine, has 60 days to present EU officials with its proposals, which will likely be identical to those put to the US judge.
Ribera and her staff can chew on those suggestions while the US case plays out. At some point, when it's clear which way the US judge is leaning, Google may wish to volunteer a global solution and address the concerns of both the DOJ and the European Commission.
Aligning with the US timing — and hinting strongly at identical remedies — means EU officials will have a seat at that table when the time comes.
—Khushita Vasant contributed reporting.
Please e-mail editors@mlex.com to contact the editorial staff regarding this story, or to submit the names of lawyers and advisers.