August will not be a relaxing month for Google’s European staffers. At least two advertising tech companies are lobbying European Union officials to launch an antitrust investigation into Google’s suite of ad products, according to a report in the Financial Times.
Google May Face Another EU Case. This One Is About Ads.
Google’s rivals are lobbying for the EU to aim its antitrust guns at ad tech.
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Google, as you know, is currently facing two investigations in the EU: A formal one on its comparative shopping service, and a probe into Android. Google has until August 17 to respond to the shopping suit, after an extension.
The FT mentions two of the “several” companies now crying foul in Brussels: OpenX and AppNexus, which is funded by Microsoft and ad giant WPP. At issue is whether Google locks clients into its products, particularly the display ad network DoubleClick, through contracts that dissuade or explicitly prohibit them from taking business elsewhere. It’s a “bundling” argument similar to the Android case.
The ad tech rivals have not filed a formal complaint, as in the two pending EU cases, but merely aired grievances to European lawmakers, according to a source familiar with the conversations. Both companies declined to comment.
Google offered this rebuttal in a statement: “We are always working to make our products work more seamlessly together, but clients are not required to use any of our DoubleClick products — separately or together.”
Automated digital ad buying and selling (programmatic, if you must) continues to grow as budgets shift from TV. Traditional ad agencies, like WPP, have increased investment in it as older revenue streams trail off. Telecoms have, too, namely Verizon with AOL at its disposal. With few exceptions, however, companies devoted solely to ad tech have struggled considerably. Advertisers looking to spend on the Internet prefer to spend with Google and, with increasing regularity, with Facebook.
If it is forced to defend an EU suit, Google will likely point to Facebook’s ascent as proof of competition. According to eMarketer forecasts, Facebook will net $6.8 billion in display ad revenue this year, next to Google’s $3.5 billion. By 2017, Facebook will more than double that distance.
The search giant has not been shy about its aims to offer a one-stop shop for ad clients’ needs. On the analyst call for its recent, record-breaking earnings, Chief Business Officer Omid Kordestani mentioned his goal to position offerings so ad clients can track spending across Google, on search and YouTube, for instance, and measure sales.
“What we like to say internally,” he said, “is we like to have one Google represented to the customer so that in these conversations with them we really understand their objectives and really, in the classic sense of the funnel, we can start the brand journey from the beginning to purchase across search, display, video.”
The FTC shuttered its antitrust investigation into Google’s ad tech last year. The EU, however, is known for being more susceptible to complaints from businesses.
This article originally appeared on Recode.net.
