EU Raises Concerns Over Google’s Online Ad Pricing Practices

European Union regulators have signalled fresh concerns over Google’s online advertising practices, warning that the US tech giant may be unfairly pushing up ad prices in a way that harms advertisers.

A letter sent to advertisers and seen by media outlets indicates that the European Commission is examining how advertising auctions on Google Search operate. In particular, officials are looking at whether the company may be artificially increasing the clearing prices in those auctions to the detriment of businesses that rely on its platform to reach customers.

Google, owned by Alphabet, already faces multiple antitrust investigations in Europe and has been fined billions of euros in recent years for competition violations. Any additional scrutiny could further strain transatlantic relations, as US officials have previously argued that American technology firms are being disproportionately targeted by European regulators. The Commission has consistently rejected those claims, saying its actions are based on competition law.

The latest concerns focus on the mechanics of the auction system that determines how much advertisers pay to display ads on Google Search. The Commission’s letter highlights questions about whether the structure of those auctions could be driving prices higher than they would be in a fully competitive environment.

Google defended its approach, stating that advertising prices are determined by a real time auction system designed to show users the most relevant ads. According to the company, factors such as advertiser competition and ad quality influence the outcome. A spokesperson said that Google Search ads enable small businesses to compete with larger brands and help keep online services accessible.

The Commission has not formally opened a new investigation at this stage. A spokesperson said there is currently no official case but confirmed that the regulator routinely monitors possible anti competitive practices across sectors and stands ready to act if there is sufficient evidence.

Advertisers who received the letter have been given until early March to provide feedback, suggesting that the Commission is gathering market input before deciding on its next steps. Such preliminary inquiries often precede formal proceedings under EU competition rules.

The issue also echoes action in the United States, where the Department of Justice has accused Google of manipulating online ad auctions in ways that benefit its own revenues. That case is ongoing and reflects broader global scrutiny of digital advertising markets, which generate tens of billions of dollars annually.

For businesses that depend heavily on search advertising, any regulatory findings could have significant financial implications. If EU authorities conclude that auction practices are distorting prices, Google could face further legal challenges or be required to change how its advertising systems operate within the bloc.