Business Reporter – News – Exclusive – Google offered to sell part of ad tech business, but that’s not enough for EU publishers, sources say

By Foo Yun Chee, Jody Godoy

BRUSSELS/NEW YORK (Reuters) – Alphabet’s Google took a major step this year to end an EU antitrust investigation by making an offer to sell its AdX advertising marketplace, but European publishers rejected the proposal as insufficient, two people with direct knowledge of the matter said on Wednesday.

Google’s lucrative ad tech business attracted the attention of EU regulators last year following a complaint from the European Publishers Council.

The European Commission then accused Google of favouring its own advertising services, thus opening its fourth procedure against the world’s most popular search engine.

Google has never before offered to sell assets in an antitrust case, according to three antitrust lawyers who were not authorized to speak publicly.

The company is in the midst of a lawsuit in the U.S., fighting antitrust claims that seek to force Google to sell its Ad Manager product, which includes AdX and Google’s publisher ad server, known as DFP.

Publishers rejected Google’s proposal because they want it to get rid of more than just AdX to resolve conflicts of interest due to its presence at nearly every level of the ad tech supply chain, the people said. The European antitrust watchdog was aware of the offer, they said.

“As we’ve said before, the European Commission’s case regarding our third-party ad products is based on misinterpretations of the ad technology sector, which is extremely competitive and rapidly evolving. We remain committed to this business,” a Google spokesperson said.

The Commission declined to comment. The European Publishers Council did not respond to requests for comment.

AdX, or Ad Exchange, is a platform where publishers can make unsold ad space available to advertisers for purchase in real time.

EU antitrust chief Margrethe Vestager suggested last year that Google get rid of sell-side tools DFP and AdX to end conflicts of interest.

However, other sources told Reuters that the Commission is unlikely to force Google to divest its assets for now, but may instead order the company to stop alleged anti-competitive practices in the coming months due to the complexity of the case.

They said a sales order could be issued later if Google fails to comply with the first EU decision, which is likely to be issued in the coming months.

Google’s advertising revenue in 2023, including search, Gmail, Google Play, Google Maps, YouTube, Google Ad Manager, AdMob, and AdSense, was $237.85 billion, or 77% of total revenue. It is the world’s dominant digital advertising platform.

(Reporting by Foo Yun Chee in Brussels and Jody Godoy in New York; Editing by Kirsten Donovan and Rod Nickel)