Google Faces EU Scrutiny Over Ad Auction Rigging

The European Commission has initiated a new investigation into Google, alleging that the company may be illegally manipulating the cost of advertising on its search engine. Officials suspect that Alphabet Inc.'s unit is artificially inflating clearing prices in ad auctions, potentially to the detriment of advertisers. This conduct, if substantiated by evidence, could lead to significant financial penalties.

If found in violation of competition rules, Google could face fines as high as 10% of its global annual sales. This new probe comes as Google already has a substantial €9.5 billion in EU antitrust fines recorded. The investigation is in its early stages, with EU watchdogs seeking information from market participants regarding Google's dominance in various online advertising markets.

This European scrutiny adds to existing concerns, including similar allegations previously made by the US Department of Justice. Google stated that its search ads help small businesses and that ad prices are determined by a real-time auction focused on relevance. The company faces further scrutiny under the EU's Digital Markets Act for other alleged practices, including unfair favoring of its own services and restricting app developers.