Google and Facebook run into more trouble over data in Europe

Europe’s top antitrust regulator is probing how Google and Facebook use data, putting the companies’ huge advertising businesses in the spotlight once again.

The European Commission said Monday that it has launched preliminary investigations into how Google (GOOGL) and Facebook (FB) gather, process, use and monetize data for advertising purposes.

Both companies have used what they know about people to build advertising businesses that generate hundreds of billions of dollars in revenue. But how they use that data is becoming a major focus for regulators on both sides of the Atlantic.

EU Commissioner for Competition Margrethe Vestager smiles during the EU Commissioners' Weekly College meeting at the European Commission headquarters in Brussels on February 6, 2019. (Photo by Aris Oikonomou / AFP) (Photo credit should read ARIS OIKONOMOU/AFP/Getty Images)

Related article Amazon is the latest target of Europe's crackdown on the power of big tech

Margrethe Vestager, the European commissioner for competition, has been particularly aggressive, voicing concerns that big tech companies may use their huge data stores to strangle upstart rivals.

Vestager, who was given an expanded portfolio as EU digital czar in September, has already opened an investigation into whether Amazon’s (AMZN) use of data from independent sellers violates competition rules.

Reuters, which first reported the new EU investigation into Google, said that documents show the focus is on data related to the company’s local search services, online advertising, online ad targeting services, login services and web browsers.

A spokesperson for Google said the company uses “data to make our services more useful and to show relevant advertising, and we give people the controls to manage, delete or transfer their data.”

“We will continue to engage with the Commission and others on this important discussion for our industry,” the spokesperson added.

Facebook did not respond to a request for comment on Monday.

National regulators are also scrutinizing Google. Britain’s competition watchdog announced Monday that it’s investigating the company’s planned $2.6 billion acquisition of Looker Data Sciences, a leading US analytics firm focused on data.

European Union Competition Commissioner Margrethe Vestager gives a at the EU headquarters in Brussels.

Related article How Europe is forcing Google to change

The Competition and Markets Authority said it would examine whether the merger would reduce competition in Britain. The regulator can examine mergers when the firms have significant sales or market share in the country.

The European Union has emerged as a key battleground for tech because of its tough rules on data protection, hate speech, taxation and competition issues.

In March, the European Commission hit Google with a third big antitrust penalty, ordering it to pay €1.5 billion ($1.7 billion) for abusing its position in online search advertising. It’s been fined €8.2 billion ($9 billion) in total by Europe since 2017.

Fines against US tech companies have even drawn the attention of President Donald Trump, who said earlier this year that Vestager “hates the United States, perhaps worse than any person I’ve ever met.”

Yet US regulators are also putting the companies under a microscope. The US Federal Trade Commission has fined Facebook $5 billion for mishandling user data, the largest financial penalty ever imposed by the regulator.

The US Justice Department is conducting a wide-ranging antitrust review of the biggest players in Silicon Valley. Alphabet, Google’s parent company, received a mandatory request for information in August.