Why it matters: Google's advertising business brought in nearly $225B in 2022 and has been growing its revenue each year since its launch in 2001. Margrethe Vestager, the European Commission's executive vice president, has suggested that Google's ad business may have to get broken up, but this is not definite. A recent press release from the European Commission said, "Structural remedies can only be imposed either where there is no equally effective behavioral remedy or where any equally effective behavioral remedy would be more burdensome for the company concerned than the structural remedy." If Google's ad business gets divested, it would be a significant loss for the company, as it is the source of 80% of its overall revenue, reaching $280B in 2022. Where to see the impact: As previously mentioned, Google's ad business is by far its most lucrative. The search giant has been incorporating new AI technology into its core ad products, including PaLM 2, its latest LLM. |
What happened: The European Commission has launched a formal antitrust complaint against Google's Advertising business, alleging that it hinders the competition in the adtech industry. The commission highlighted that, since 2014, Google has abused its dominance in the European Economic area-wide markets by favoring its own 'AdX' ad exchange in the ad selection auction and avoiding competing ad exchanges by mainly placing bids on AdX. The commission argues that Google's conduct skews a competitive advantage for AdX over rival ad exchanges.