Italian watchdog investigates Google over alleged advertising market abuse

FILE PHOTO: The logo of Google is seen in Davos, Switzerland Januar 20, 2020. REUTERS/Arnd Wiegmann/File Photo

ROME/MILAN (Reuters) - Italy's antitrust authority is investigating Alphabet's Google GOOGL.O for alleged abuse of its dominant position in the Italian online display advertising market, it said on Wednesday.

The investigation follows a complaint filed by Italian digital advertising lobby group IAB last year, and adds to regulatory scrutiny the Silicon Valley tech giant is facing worldwide.

The watchdog said it suspects Google of using enormous amounts of data collected through its own applications to prevent rival operators from competing effectively. It said it carried out inspections of some Google offices on Tuesday.

A Google spokesman in Italy said in an e-mailed statement the company was working constructively with the Italian authorities.

He added that the Google policy changes on which the watchdog was focusing were partly aimed at squaring European Union privacy law with how its advertising tools work.

Angela Mills Wade, executive director of the European Publishers’ Council, welcomed the Italian investigation, which must be completed by Nov. 2021

She said the tech giant’s “unrivalled position” hit “publishers and, ultimately, their readers as less advertising revenue leads to less investment in journalism”.

The Italian online advertising market generated revenue of 3.3 billion euros ($3.9 billion) last year, with display advertising, such as banner ads, accounting for nearly 37%.

Reporting by Elvira Pollina and Giulia Segreti; Editing by David Goodman and Jan Harvey