Google Offers to Change Adtech Policy in EU, Rules Out Business Divestment

Context:

• Google has proposed changes to its advertising technology (adtech) policies to the European Union (EU) in response to mounting antitrust scrutiny, while firmly rejecting demands to divest parts of its adtech business.

• The move follows aggressive regulatory action by the European Commission and parallel investigations by the US Department of Justice (DoJ) into Google’s dominance in the digital advertising ecosystem.

Key Highlights:

Regulatory Action & Antitrust Background

• In September, the European Commission fined Google €2.95 billion for favoring its own online display advertising technology services.

• EU competition authorities raised concerns over conflicts of interest arising from Google’s control over:

  • Advertiser tools

  • Publisher tools

  • AdX ad exchange

Google’s Proposed Policy Changes

• Publishers using Google Ad Manager will be allowed to:

  • Set different minimum prices for different bidders

• Aim:

  • Reduce preferential treatment

  • Address vertical integration concerns in the adtech supply chain

Interoperability Measures

• Google has offered to:

  • Increase interoperability between its tools and rival platforms

  • Provide greater choice and flexibility to publishers and advertisers

Resistance to Divestment

• The EU had suggested that selling part of Google’s adtech business could resolve competition concerns.

• Google opposed this, arguing that:

  • A forced break-up would be disruptive

  • It could harm thousands of European publishers and advertisers dependent on its tools

Global Regulatory Parallelism

• Google’s EU proposal mirrors commitments made in the US Department of Justice investigation.

• The US DoJ is seeking the sale of AdX, with the case currently pending before a US court.

• EU regulators retain the option to impose a future breakup order if anti-competitive behaviour persists.

Relevant Prelims Points:

• Issue: Market dominance of Big Tech firms in digital advertising.

• Causes:

  • Vertical integration of adtech services

  • Control over multiple layers of the advertising value chain

• Key Concepts:

  • Adtech: Software and tools for automated digital advertising

  • Antitrust: Laws preventing monopolistic and anti-competitive practices

  • Interoperability: Ability of systems to work seamlessly with others

• Impact:

  • Greater regulatory oversight of Big Tech

  • Increased competition and market transparency

Relevant Mains Points:

• Economic & Competition Dimension:

  • Dominance of integrated adtech platforms can distort fair competition

  • Market power concentration raises barriers for smaller firms

• Governance & Regulatory Perspective:

  • EU’s proactive antitrust enforcement contrasts with slower global responses

  • Regulatory dilemma: structural remedies (break-ups) vs behavioral remedies (policy changes)

• International Relations Aspect:

  • Convergence of EU and US approaches towards Big Tech regulation

  • Signals emergence of global norms on digital competition governance

• Way Forward:

  • Continuous monitoring of Google’s compliance

  • Strengthen cross-border cooperation among competition authorities

  • Balance innovation incentives with fair market competition

UPSC Relevance (GS-wise):

• GS 2: Governance, Global Regulatory Frameworks

• GS 3: Economy, Competition Policy, Digital Markets

• Prelims: Antitrust, Adtech, Interoperability, Big Tech Regulation