Google targeted by EU over its search advertising auction practices

Alphabet unit Google risks another EU antitrust headache as regulators said they are concerned that the U.S. tech giant may be unfairly driving online advertising prices higher, a letter to advertisers seen by Reuters showed.

Google, which has been ‌fined billions ⁠of ⁠euros in Europe for antitrust violations in recent years, is the subject of several European Union antitrust investigations. Another could add to tensions with the US government, which says U.S. Big Tech has been unfairly targeted, claims which the European Commission has dismissed.

The Commission singled out the auctions for the sale of advertising on Google Search, "in ⁠particular, the ‌way in which Google has been artificially increasing the clearing price of such auctions to the detriment of advertisers," ⁠the letter said. Google, which dominates the multi-billion-dollar online advertising market, said Google Search ads help small businesses to compete with the biggest brands and keep the web free for everyone.

"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," a Google spokesperson said.

A Commission ‌spokesperson declined to comment, saying there is no formal investigation on the matter.

"In general, the Commission monitors possible anti-competitive market practices and abusive ⁠conduct in all sectors and stands ready to investigate cases where concrete evidence thereof is found," the spokesperson said.

Recipients of the letter were given until March 2 to provide feedback. The US Justice Department has accused Google of manipulating online auctions with formulas to favour its own bottom line. Bloomberg was the first to report the potential EU investigation.