Google Adds Advertising Surcharges In AT, UK, TU To Account For Regulatory Onus

Googles hikes advertising fees

 

Google sent out a notice to all its advertisers this Tuesday stating that the tech behemoth would now being adding a surcharge to all ad spend in Austria, the United Kingdom, and Turkey.

This is apparently Google’s way of dealing with the increased costs of complex regulations in the three nations in question.

As the email states:

Dear Customer,

On 1 November 2020, Google will begin charging new fees for ads served in the United Kingdom, Turkey, and Austria.

New fees

As of 1 November 2020 we will begin adding a fee to your next invoice or statement for ads served in specific countries:

Ads served in Turkey: a 5% Regulatory Operating Cost added to your invoice or statement
Ads served in Austria: a 5% Austria DST Fee added to your invoice or statement
Ads served in the United Kingdom: a 2% UK DST Fee added to your invoice or statement

The Regulatory Operating Costs are being added due to significant increases in complexity and cost of complying with regulations in Turkey. In Austria and the United Kingdom, the DST fee is driven by the new digital services tax in these countries.

 

The decision by Google will come as no surprise to those who have closely watched the international legal landscape vis a vis data privacy and regulatory compliance.

Looking to the second order effects, however, it seems the greatest impact will be not on Google’s advertisers- who will merely add the surcharge percentage to their bidding calculations- but rather to those online businesses within the three countries in question whose ad revenue may be reduced as a consequence.

To wit, the surcharge fees in these countries will likely reduce the income of websites and other web properties within these countries monetizing via Google, since the media buyers advertising on those properties through Google will be having to account for this surcharge in their bidding.

This may be a blow for the many small online businesses that are supported through advertising revenue.

However, with most individuals ranking online privacy as a worthy goal, any value judgement would seem to hinge on whether or not the increased regulatory burdens in question will be a boon for user privacy, or merely a drag on advertising revenues for businesses in those countries.