EU Probes Google Ads, Fines X Under Digital Services Act
The European Union has opened a new antitrust probe into Google over alleged manipulation of search ad pricing. Separately, social media platform X (formerly Twitter) was recently fined under the Digital Services Act's Article 40, bringing renewed scrutiny to the data access obligations for Very Large Online Platforms operating in the EU.
- The EU's latest probe into Google's ad practices centers on suspicions that the company "artificially increased the clearing price" in its advertising auctions, potentially harming businesses that rely on its platform. Penalties for such breaches can be as high as 10% of a company's global annual revenue. - This is not the first time Google has faced antitrust charges in the EU; the company has been fined over €8 billion in previous cases related to its Shopping service, Android operating system, and AdSense platform. A significant fine of €2.42 billion was imposed in 2017 for Google favoring its own comparison shopping service. - The fine against X is the first of its kind under the Digital Services Act (DSA) and totals €120 million. The penalty addresses multiple breaches, including the deceptive design of its "blue checkmark" verification, a lack of transparency in its ad repository, and failure to provide researchers with access to public data. - Article 40 of the DSA mandates that Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) grant vetted researchers access to data to study systemic risks within the EU. X was found to have imposed unnecessary barriers, undermining this requirement. - VLOPs and VLOSEs are defined as platforms with over 45 million monthly active users in the EU. These designated platforms have more stringent obligations under the DSA to address systemic risks related to illegal content and impacts on fundamental rights. - The DSA and its counterpart, the Digital Markets Act (DMA), represent a significant push by the EU to increase the accountability of major tech companies, focusing on creating a safer online space and ensuring fair competition. - These EU regulations are creating transatlantic friction, with some U.S. officials arguing they unfairly target American tech companies and threatening potential retaliatory measures. Compliance costs for U.S. companies under these regulations are estimated to be around $2.2 billion annually. - The European Commission has signaled a firm stance on enforcement. In a previous ad tech case, the Commission considered forcing Google to divest parts of its advertising business to resolve competition concerns.
