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MLex Market Insight

EU’s clash with Google over ad businesses raises radical prospect of divestiture

MLex Market Insight

MLex Market Insight

News

4.99 Ratings

🗓️ 23 June 2023

⏱️ 18 minutes

🧾️ Download transcript

Summary

Google is back in the European Union’s firing line over its ad businesses, with the bloc’s enforcer suggesting that the tech giant’s operations may be anticompetitive. But what’s truly radical about this most recent clash is the remedy that top official Margrethe Vestager is putting on the table: a requirement that Google divest part of its services. A forced breakup of a significant company isn’t how the European Commission usually does business. This time, however, EU enforcers can look across the Atlantic to build its case for some old-school trust-busting.

Transcript

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0:00.0

At this stage of the investigation, we believe that Google's conduct may amount to an abuse of a dominant position.

0:18.0

If proven, these conducts would be illegal under our rules.

0:23.3

We should look ahead. If we come to the conclusion that these practices are illegal,

0:29.3

we'll need to ensure that they are brought effectively to an end.

0:33.1

And that was the voice of the European Union's Commissioner for Competition, Marguerta Vesteyer,

0:37.4

with an announcement that may prove to be a game changer in the bloc's regulatory clash with

0:42.9

big tech. I'm James Panicki coming to you from the Lexus Nexus officers in Melbourne, Australia.

0:48.5

Welcome to M-Lexis weekly podcast covering the biggest regulatory stories of the moment,

0:53.6

and they don't get much bigger than this one.

0:56.0

It's not just that the European Commission suspects that Google's ad business is anti-competitive,

1:01.9

what's groundbreaking is the solution that the Commission is pointing to.

1:06.0

Here's what Vestaya had to say about that last week.

1:08.7

A remedy requiring Google to just change its behavior would allow Google to do what it has

1:16.0

been doing so far just under a different disguise.

1:20.3

Should the Commission conclude that Google acted in an illegal manner, it might require

1:25.9

Google to divest part of its services. For instance,

1:30.3

Google could divest its cell site tool, DFP and ADEX. By doing so, we would put an end to the

1:38.5

conflict of interest. That's right. The Commission is considering some old-school trust-busting

1:43.9

involving a forced

1:45.3

breakup of Google's ad business. As we'll hear on today's podcast, this is radical stuff

1:50.7

in an EU context. However, the Commission can rely on some transatlantic political coverage

1:56.8

as well. It's a fascinating, evolving story that's been covered meticulously by our Brussels-based

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