Once again, the advertising businesses are in the spotlight!
Top antitrust regulator in Europe are investigating Google and Facebook to determine how they use the data they harvest. The European Commission said on Monday that it has launched a probe into how the big techs, Google and Facebook monetise the data for ad purposes.
Both companies operate free platforms but make their proceeds from advertisement. Anybody can own a Facebook, Gmail, Instagram, or YouTube account for free but once you do this, you have automatically traded your data which is supposedly used for target marketing.
Both companies use the data submitted such as age, location, sex, etc, to build advertising businesses that generate hundreds of billions in revenue. However, how they use the data harvested on their platforms has become a major focus for regulators in Europe.
Margarethe Vestager, the European Commissioner for competition has been on their heels regarding how they use huge data scores to suppress start-up rivals. She has been aggressive about the topic, much that Google has paid dearly for it.
Vestager has opened a probe to determine whether Amazon’s use of data from independent sellers violated competition rules.
Reuters was the first to report the new investigation into Google which said focus is on data related to the company’s local search services, online advertisement, online and targeting services login services and web browsers.
A spokesperson from Google replied in defence that the company uses the data to make the services more useful and to how people adverts that are relevant to them and that Google gives people control over their data.
“We will continue to engage with the Commission and others on this important discussion for our industry,” the spokesperson added.
National regulators are also involved in the probe. Google in June announced that it would acquire Looker, a leading US analytics firm focused on data for $2.6b. The Looker acquisition is expected to be complete this year. However, with the antitrust scrutiny of Google and other big techs might give it a pause into big ticket acquisitions.
The regulator said it would determine if the merger would minimise competition in Britain. Amazon and Microsoft are seen as the two leaders in the market. The regulator can examine mergers when the firms have significant sales in the country. Google already has dominant positions in search and digital advertising, but is trying to catch its luck in the cloud.
The European Union has emerged as a nightmare for big techs in the US because of its stringent rules on hate speech, data protection and competition rules.