AGCM

The Authority questions the discriminatory use of the huge amount of data collected through its various applications, preventing rivals from competing effectively as well as adversely affecting consumers.

The Italian Competition Authority opened an investigation against Google for an alleged abuse of dominant position. The undertaking, controlled by Alphabet Inc, might have violated Article 102 of the Treaty on the Functioning of the European Union with regard to the availability and use of data for the design of display advertising campaigns, i.e. the space that publishers and website owners make available for the display of advertising content.

In the key market for online advertising, which Google controls also thanks to its dominant position on a large part of the digital value chain, the Authority questions the undertaking's discriminatory use of the huge amount of data collected through its various applications, preventing rivals in the online advertising markets from competing effectively. More specifically, Google appears to have engaged in an internal/external discriminatory conduct, refusing to provide its competitors with Google ID decryption keys and excluding third-party tracking pixels. At the same time, Google has allegedly used tracking elements enabling its advertising intermediation services to achieve a targeting capability that some equally efficient competitors are unable to replicate.

Online advertising in Italy in 2019 was worth more than 3.3 billion euros, representing 22% of the resources of the media sector, and display advertising alone generates a turnover of more than 1.2 billion euros. In terms of value, online advertising sales are the second most important source of revenue in the media sector.

Through cookies, banners, pop-ups or other forms of advertising visible during the consultation of a website, advertisers, agencies and advertising intermediaries may acquire relevant data as to the user's buying choices and thus customize subsequent campaigns, adjusting the positioning of messages to the contents of interest to the individual user.

In addition to this relevant data, Google has multiple tools allowing a detailed reconstruction of the profile of users who are the addressees of advertisements. Such tools include the Android mobile operating system, installed on most smartphones used in Italy, the Chrome mobile device browser, for mobile search, the Chrome personal computer browser, Google Maps/Waze cartography and navigation services and all other services provided through Google ID (gmail, drive, docs, sheets, Youtube).

The conducts investigated by the Authority may have a significant impact on competition in the various markets of the digital advertising value chain, with wide repercussions on competitors and consumers. The absence of competition in the intermediation of digital advertising, in fact, might reduce the resources allocated to website producers and publishers, thus impoverishing the quality of content directed to end customers. Moreover, the absence of effective competition based on merits could discourage technological innovation for the development of advertising technologies and techniques less intrusive for consumers.

On October 27, the Authority conducted inspections at Google's premises, with the collaboration of the Tax Police.

Rome, 28th October 2020