Alphabet’s Google (NASDAQ: GOOGL) ticked lower in pre-market trading at the time of publishing on Wednesday after the tech giant was charged by European Union (EU) anti-trust regulators with anti-competitive practices that could result in the break up of the company’s adtech business.
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The EU has put forth its charges in its statement, two years after opening an investigation. These charges against Google revolve around its alleged anti-competitive behavior in the adtech market, specifically concerning the use of its technology stack, its ad exchange AdX to maintain a dominant position and restrict competition. Adtech refers to the technology that facilitates targeted advertising by collecting and analyzing user data. The investigation has focused on Google’s practices in online display advertising, where the company holds a prominent market position.
Adtech business made up around 79% of GOOGL’s total revenues last year. According to a Reuters report, citing data from Insider Intelligence, Google is the most dominant digital advertising platform with a market share of 28% of ad revenues globally.
According to Reuters, EU antitrust chief Margrethe Vestager stated in a press conference that the tech giant may have to sell part of its adtech business as a “behavioral remedy is unlikely to be effective at stopping the anti-competitive practices.”
Analysts are bullish about GOOGL stock with a Strong Buy consensus rating based on 29 Buys and three Holds.
