Google's Dominance in Ad Tech Under Scrutiny, EU Alleges Antitrust Breach, Suggests Compulsory Divestment

Alphabet Inc's GOOG GOOGL Google has been accused by the European Union of violating antitrust regulations in the field of advertising technology (ad tech). To address the EU's concerns, the Union aims to dismantle certain segments of the tech giant's business.

The European Commission has made an initial determination that Google holds a dominant position in the European market for publisher ad servers and programmatic ad-buying tools for the open-up, CNBC reported.

It has also stated that Google has been exploiting this dominant position since at least 2014.

In April, Google proposed to argue the U.S. Justice Department's alleged breach of antitrust law to build and maintain its search dominance. 

Alphabet will be allowed to review the concerns raised by the Commission, present a written defense, and request an oral hearing to express their comments.

"The Commission's preliminary assessment suggests that the only effective solution to address the competition concerns is the compulsory divestment of a portion of Google's services," stated Margrethe Vestager, the EU Competition Chief.

Vestager added, "Google collects users' data, sells advertising space, and operates as an online advertising intermediary. Thus, Google is involved in nearly all ad tech supply chain aspects. Our initial concern is that Google may have exploited its market position to favor its intermediary services. These practices may have harmed not only Google's competitors but also the interests of publishers while simultaneously increasing costs for advertisers. If proven, Google's actions would violate our competition regulations."

Price Action: GOOG shares are down 0.35% at $123.99 during the premarket session on the last check Wednesday.