The EU has announced a formal investigation into Google’s advertising business, to establish whether it harmed competition by restricting or excluding its rivals from data and services.

Google, which earned roughly $147bn in advertising revenues last year, dominates the market and operates the leading tools for buying and selling ads, as well as the biggest market where online ad deals are struck.

“Google is present at almost all levels of the supply chain for online display advertising,” said Margrethe Vestager, the EU’s executive vice-president in charge of competition policy.

“We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.”

In particular, the probe will examine how Google insists that advertisers can only buy display ads on YouTube by using its own tools.

Investigators also want to know if Google’s tools favour the company’s ad exchange, the marketplace where deals are made, and whether rival services can access data on how users react to the ads traded on Google’s exchange.

Vestager added that Brussels would investigate Google’s policies on tracking users “to make sure they are in line with fair competition”.

The European Commission, the executive body of the EU, said it would consider “the need to protect user privacy” in line with the General Data Protection Regulation. It added: “Competition law and data protection laws must work hand in hand to ensure that display advertising markets operate on a level playing field in which all market participants protect user privacy in the same manner.”The probe comes at a time when regulators in Europe and elsewhere are venturing into investigations that look at the crossover between privacy and competition concerns.

Last year the French competition authority, for instance, opened a probe into Apple’s update to its privacy standards. The regulator didn’t force the company to hold off from implementing the changes.

The EU’s probe into Google comes days after France fined the company €220m for abusing its dominant position in the advertising sector. Contrary to the three ongoing appeals Google has against the EU before the courts, Google said it would not appeal and agreed to some changes globally.

Google said: “We will continue to engage constructively with the European Commission to answer their questions and demonstrate the benefits of our products to European businesses and consumers.”

The probe comes at a time when draft legislations to tame the power of Big Tech are being debated in Brussels. The rules, expected to be enacted during the first half of 2022, will include legal requirements for tech companies to share their data with rivals to enable competition.