Google Hit by EU Antitrust Probe Over Search Ads Pricing

(Bloomberg) — Google, the target for billions of euros in European Union antitrust fines, has been hit by a fresh EU probe over concerns it’s illegally rigging the cost of advertising on its search engine.

The European Commission suspects the Alphabet Inc. unit is “artificially increasing the clearing price” of ad auctions “to the detriment of advertisers,” according to a copy of a Feb. 9 letter to potentially affected businesses, seen by Bloomberg.

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The Brussels-based regulator said that the suspected conduct — if backed up by evidence — could violate competition rules, which can trigger fines as high as 10% of global annual sales.

In an accompanying request for information, EU watchdogs asked market participants about Google’s dominance across several online advertising markets. While the probe is in its early stages, it could in the near future be announced formally by Competition Commissioner Teresa Ribera, according to people familiar with the case, who spoke on condition of anonymity.

“Google Search ads help small businesses compete with the biggest brands, driving economic growth and keeping the web free for everyone,” the Mountain View, California-based company said in an emailed statement.

“Ad prices are determined by a real-time auction designed to show people the most relevant ads, taking into account factors like advertiser competition and ad quality,” Google added.

The EU commission declined to comment.

Similar allegations have earlier been leveled against Google by the US Department of Justice, which had attempted to impose a sale of Google’s chrome browser. That move has been overruled, for now, by a Washington judge.

The European scrutiny risks adding to the company’s €9.5 billion ($11.3 billion) EU fines tally and worsening relations with the Trump administration. It also adds to a string of fresh probes launched by Brussels authorities in recent weeks against Google.

Under the EU’s powerful Digital Markets Act, Google was recently handed a six-month deadline to lift technical barriers to rival AI search assistants on Android and give key data to other search engine providers.

Separately, the company faces upcoming penalties under the DMA over allegations it unfairly favors in-house services across its sprawling search empire and for preventing app developers from steering consumers to offers outside of its Play Store.