The Irish Data Protection Commission (DPC) has started an inquiry into the way that Google provides advertising services across the European Union.
The watchdog is investigating whether the use of personal data to target online advertising is compliant with European privacy rules.
The search giant’s Ad Exchange system is used by companies to target people with adverts across the internet.
The Irish DPC could fine Google up to 4% of its global annual turnover.
“The purpose of the inquiry is to establish whether processing of personal data carried out at each stage of an advertising transaction is in compliance with the relevant provisions of the General Data Protection Regulation (GDPR),” Irish DPC spokesman Graham Doyle told the BBC.
It would not be the first time Google has been fined by a European data regulator.
The company was fined 50 million euros ($55m; £44m) by the French data regulator CNIL in January, a decision that company is appealing.
CNIL said it had levied the record fine for “lack of transparency, inadequate information and lack of valid consent regarding ads personalisation”.