Google offers EU to change adtech policy, no divestment

By Foo Yun Chee

BRUSSELS (Reuters) -Alphabet's Google has offered to make it easier for publishers and advertisers to use its online advertising technology, defying EU antitrust regulators' call for it to sell part of the business to address conflicts of interest.

Regulators on both sides of the Atlantic are targeting Google's ownership of tools used by advertisers and publishers along with its ad exchange AdX, which sits in the middle.

The European Commission, which acts as the EU competition watchdog, fined Google 2.95 billion euros ($3.4 billion) in September for favouring its own online display technology services to reinforce AdX's central role.

It said this behaviour harmed competitors, advertisers and publishers and gave the company until November to come up with measures to end conflicts of interest along the adtech supply chain, suggesting a sale of part of the business.

Google said on Friday that it had submitted its proposal to the EU enforcer, which is broadly similar to the one offered in the U.S. Department of Justice investigation on the same issue.

"Our proposal fully addresses the EC's decision without a disruptive break-up that would harm the thousands of European publishers and advertisers who use Google tools to grow their business," the company said in a blogpost.

"Our plan includes immediate product changes to end the specific practices the Commission challenges. For example, we are giving publishers the option to set different minimum prices for different bidders when using Google Ad Manager," it said.

The company also offered to increase the interoperability of its tools to give publishers and advertisers more choice and flexibility.

Sources have previously told Reuters that the EU enforcer could issue a breakup order at a later stage if Google continued anti-competitive practices, based on a precedent-setting case involving Microsoft two decades ago.

The EU case is similar to that of the U.S. Department of Justice, which wants Google to sell AdX. The company has said that would be technically unworkable and would lead to prolonged uncertainty for advertisers and publishers. The case is now before a U.S. court. 

If the judge rules in favour of the Justice Department, it would resolve the issue for the Commission, the sources said. 

($1 = 0.8575 euros)

(Reporting by Foo Yun CheeEditing by Mark Potter)