Good morning and welcome to Europe Express.
Google’s run-ins with European competition authorities are far from over. Its lucrative adtech business is now the focus of a new complaint by major media publishers, lodged today with the European Commission. We’ll look at what the publishers’ grievances are and why the adtech sector is the subject of increased regulatory attention.
Russia began massive military exercises in Belarus and naval drills in the Black Sea yesterday and there was little progress to report on the diplomatic front after a UK-Russia meeting in Moscow described as “a dialogue of a mute person with a deaf person”.
Meanwhile, EU diplomats told Europe Express that the commission is keeping a tight lid on the sanctions package, with Austria, Hungary and Italy so far raising the most issues with their industries being affected by the sanctions. To avoid these fissures on the united EU front turning into major crevasses, Brussels plans to keep the text to itself and only show it to capitals in case of a Russian invasion, with a very short deadline to approve the sanctions.
Speaking of diplomatic contacts, Nato hosted the UK prime minister and his political rival yesterday, separately, in a rare sequence of events. We’ll bring you up to speed with why the two made an appearance in Brussels but avoided the EU quarter — and what to expect from today’s meeting in London between the EU Brexit commissioner and the British foreign secretary.
Google in the line of fire, again
Google is again the subject of an EU competition complaint, this time concerning alleged abuses in the advertising technology sector, writes Javier Espinoza in Brussels.
The European Publishers Council, a body that comprises leading press publishers including The New York Times, Germany’s Axel Springer, the UK’s Guardian and the Daily Mail, has today filed a complaint with the European Commission, asking it to hold Google “accountable for its anti-competitive conduct and impose remedies to restore conditions of effective competition in the adtech value chain”.
Google has denied wrongdoing in its adtech business. “When publishers choose to use our advertising services, they keep the majority of revenue and every year we pay out billions of dollars directly to the publishing partners in our ad network,” said a Google spokesperson.
In essence, argues the EPC’s Angela Mills-Wade, Google has a conflict of interest in the space because as a “super manager” it acts as a buyer, seller and intermediary in adtech.
The plaintiffs’ lawyer, Damien Geradin, added: “It is as if Goldman Sachs were on the side of the buyer, the seller and also ran the exchange.”
Since its acquisition of DoubleClick in 2008, Google has embarked on “a barrage of unlawful tactics to foreclose competition in adtech”, the news publishers have told regulators in Brussels. “This strategy paid off, and Google has achieved end-to-end control of the adtech value chain, boasting market shares as high as 90-100 per cent in segments of the adtech chain.”
The complaint is part of a wider probe led by Brussels into whether Google is abusing its monopoly in online ads.
The adtech sector is also subject to further regulatory efforts under the Digital Services Act, with the European parliament pushing for stricter limits on what companies can do as part of targeted advertising.
And under the Digital Markets Act, online platforms (including Google) deemed large enough to act as market arbiters — or gatekeepers — will in future face limitations on promoting their own services and products to the detriment of smaller rivals.
Some worry Google is taking advantage of the “regulatory vacuum” as the bloc puts the final touches to DSA and DMA, which are unlikely to enter into force before the end of this year.
Google is feeling the heat elsewhere too. Germany recently designated the company as being of “paramount significance across markets”, meaning it will have to comply with more onerous regulation.
In France, Google agreed to pay a fine and offer some concessions after the authorities there opened an investigation into its practices, although the EPC considers these concessions are largely insufficient. News Corp was behind the complaint alongside French-language newspapers Le Figaro and Le Soir.
Chart du jour: Prices spike
The surge in energy prices is set to exert a “more protracted drag” than expected on the European economy this year and drive higher inflation, the European Commission said yesterday in its latest growth outlook. Growth this year would fall short of previous forecasts. (More here)
Awkward meetings
Britain’s national psychodrama moved to the Belgium’s capital yesterday with both the prime minister and the leader of the opposition in town to meet Nato secretary-general Jens Stoltenberg, writes Andy Bounds in Brussels.
First in: Boris Johnson, who arrived in the morning to make clear his support for the alliance’s stance against Russia. The UK is making ready another 1,000 troops to assist with any refugee crisis if Moscow escalates with a full invasion of Ukraine.
The prime minister was followed by Keir Starmer, the leader of the Labour opposition. Labour sources claim Starmer booked first, and when Downing Street was notified out of courtesy, Johnson demanded an audience before him.
Nato would only say that it was a scheduled meeting with the UK’s prime minister.
It is rare for Stoltenberg to meet opposition leaders but he is a fellow centre-left politician (from Norway). Starmer wants to show the party has changed since the departure of his predecessor Jeremy Corbyn, who earlier in his career opposed Nato membership and remained lukewarm about the US alliance.
However, he remains just as lukewarm towards the EU. Neither Johnson nor Starmer found time to visit the European Commission across town from Nato HQ. Labour is anxious not to be painted as pro-Brussels while a dispute continues over Northern Ireland.
There is yet another round of talks today between Liz Truss, UK foreign secretary, and Maros Sefcovic, the Brexit commissioner, over the Northern Ireland protocol, which regulates trade between Great Britain and the region.
Truss stressed that fixing it was an “absolute priority for me”, but EU diplomats say she has yet to make the compromises they need to do so. Today could be the last chance to do so before an election campaign in Northern Ireland from March forces a pause.
Brussels has suggested a meeting of the Joint Committee on February 21, a body consisting of the UK and member states that is required to agree any changes to the protocol.
The best officials are hoping for is a joint statement to keep working and endorsement of EU plans to keep British medicines flowing to Northern Ireland. But with Truss promising bold new proposals they do not underestimate London’s ability to spring a surprise.
What to watch today
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France’s President Emmanuel Macron chairs One Ocean summit in Brest
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EU Brexit commissioner Maros Sefcovic meets UK foreign minister Liz Truss in London
Smart reads
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Chips Act, destroyed: “Industrial policy at its absolute worst,” writes Daniel Gros from the Centre for European Policy Studies on the European Commission’s latest subsidy plans regarding semiconductors. Gros takes issue with the announced funding, which is based on just €250mn in fresh EU money, saying it is “highly misleading” to suggest that the Chips Act will have a major impact when a single foundry can cost billions.
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Arctic domination: Russia’s Arctic policy is a part of its strategy for exerting economic and political influence over Europe, writes the German Institute for International and Security Affairs in this policy brief. The Arctic states have to perform a delicate balancing act: they want to secure sea routes and resources but avoid spiralling escalation in the region.
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Southern consequences: A new Russian invasion of Ukraine could have consequences for European interests in the Middle East and north Africa, according to this piece by the European Council on Foreign Relations. It could further disrupt energy supplies, exacerbate food insecurity, and help states in the region gain leverage over the US and Europe.
