Best known as the world’s most-used search engine, Google has leveraged its vast catalogue of domains to build an ad network that has drawn the budgets of marketers almost everywhere. While highly lucrative for Google, this network has drawn the ire of market participants and regulators across the globe.

At the start of the decade, US regulators hit Google with what The Guardian dubbed as “the biggest antitrust case in a generation”. Three years later, and the European Commission has presented a new contender for this title, threatening Google with regulatory sanctions which could transform ad tech as we know it.

It’s not me, it’s EU

Two years after opening an antitrust investigation into Google, the European Commission threatened the company with its harshest regulatory penalty to date: a potential break-up of its ad business. The Commission accused the tech giant of "favouring its own online display advertising technology services" to the detriment of rivals, coming to the preliminary conclusion that a partial sell-off of Google’s ad tech business was the only viable resolution – the regulator went as far as to say that “a behavioural remedy is likely to be ineffective”. Ouch.

Although unconfirmed, the threat of a mandatory break-up has sent shockwaves across the industry. If Google was forced to sell part of its ad network, there could be major ramifications, not only for the tech giant but for the entire ad tech ecosystem.

What could this mean for Google?

In one word: trouble. While it may have its metaphorical fingers in many metaphorical pies, the bulk of Google’s revenue comes from advertising. In 2022, Google’s ad business brought in around USD$225bn (~£175.8bn) for the firm, about 80% of its revenue. The company is also reported to hold a 28% market share of all global ad revenue, a figure which highlights its dominance in the advertising space.

If realised, a sell-off could not only reduce the profitability of Google’s ad business, but lead to a major restructure of the company’s ad network. Although it’s normal to rediscover one’s self following a break-up Eat, Pray, Love style, it’s hard to imagine Google would be keen to rebuild its ad business in a way that would diminish its market dominance. It should, therefore, come as no surprise that Google has pushed back against the European Commission, with VP of global ads Dan Taylor asserting that “publishers, and advertisers choose to use Google because our products are effective and reliable”, skirting around accusations of anticompetitive practices.

What could this mean for the tech sector?

Now, this is where things get a bit more interesting: as Margarethe Vestager put it, Google’s presence in ad tech is currently “unrivalled by anyone else”, so a break-up of its ad business could create numerous opportunities for other players in the space. Should Google's dominance be reduced, advertisers and publishers may begin to explore alternative platforms, driving innovation and increasing competition in the ad tech space.

In his response to the European Commission, Dan Taylor argued that a break-up of Google’s ad business “would diminish the availability of free ad-supported content that benefits everyone.” While Taylor’s stance is understandable (what senior exec would ever concede that their company’s practices at the very least steer towards monopolistic?), it’s fair to say that it isn’t accurate: by accident or design, Google’s dominance in ad tech has meant that smaller players have had limited space in the market. A break-up of its tech business could increase, not only competition, but innovation; by creating a more level-playing field, advertisers will need to work even harder to differentiate themselves from competitors.

A new era for advertisers?

Beyond creating more space within the market, a break-up of Google’s ad network could result in a much larger overhaul of the ad tech ecosystem. For example, over 7 million advertisers currently rely on Google’s ad network, so a break-up of the network could force them to revamp their strategies and find new platforms to reach their target audiences. This forced adjustment could, on the one hand, be troublesome for advertisers and publishers familiar with Google’s brand and offering. On the other hand, however, this could present a unique opportunity to reset the status quo: without the dominance of Google, smaller ad networks may have the opportunity to focus on niche, developing services, offering more tailored solutions than a company the size of Google could.

At the time of writing, a break-up of Google’s ad network remains undetermined and so it is difficult to understand how impactful it may be. Should it come to fruition, however, even a partial sell-off of Google’s ad tech business has the potential to completely reshape the future of the ad tech industry, affecting everything from market shares to infrastructure. Could an industry that has struggled to prepare for a post-cookie future adapt to a landscape without Google? Let’s hope so – if they ever have to.