Rivals ask EU to probe Google’s role in advert technology market

Robert Cookson and Christian Oliver

Google is facing a new threat in its legal battle with Brussels, as its rivals ask regulators to probe the group's dominance of the technology at the heart of the $60 billion market for online display advertising.

Several companies — including OpenX and AppNexus, which is part-owned by WPP and Microsoft — have visited the European Commission in recent months to argue that Google may be unlawfully stifling competition in the market for advertising technology.

Such technology is used by advertisers and online publishers to buy and sell the various display advertising formats such as banners and videos that appear on websites.

According to people informed about the meetings, the companies' grievances relate to the way in which Google allegedly "ties and bundles" its advertising technology products through contracts that discourage or prevent customers from using rival services. OpenX and AppNexus declined to comment.

Dado Ruvic | Reuters

The companies have submitted documents to the commission related to their concerns but have not filed a formal complaint. As some of the companies do business with Google as well as competing with it, they have kept a low profile for fear of retribution.

The European Commission launched an antitrust case against Google in April, charging the company with abusing its dominance in web search and mobile operating systems. Google denies the charges.

People close to the commission confirmed that Brussels had received "commercial" information from some companies but cautioned that the advertising technology industry was not the "specific focus" of any investigation.

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Google became a major provider of tools for delivering display ads in 2007, when it acquired DoubleClick for $3.1 billion. The company's technologies include a buying tool for advertisers, an ad-serving product for publishers and a so-called ad exchange that helps both sides buy and sell ads in real time based on data that Google holds on internet users.

Google said: "We are always working to make our products work more seamlessly together, but clients are not required to use any of our DoubleClick products — separately or together."

The company provides little detail about the size of its various business units, but according to estimates from Pivotal Research, last year Google generated gross revenues of $49 billion from search, $3.6 billion from YouTube, $2.1 billion from DoubleClick, and $6.9 billion from Google Display Network and other display ad products.

In 2013, the Federal Trade Commission opened an antitrust investigation into Google's display advertising practices, although the US competition authority closed the probe last year without levelling any charges.

Ben Edelman, an associate professor at Harvard Business School who this year published a paper about Google's use of tying and bundling, said that such tactics have been a key driver of the company's growth.

However, experts on European competition law said that bringing a case against the company related to the advertising technology market would be challenging, as there is a dearth of data about the size and shape of the market and the extent of Google's dominance.