The UK Competition and Markets Authority (CMA) has provisionally concluded that Google has been engaging in anti-competitive practices within the open-display ad tech sector, potentially harming thousands of UK publishers and advertisers.
In the statement of objections issued to Google, the British antitrust regulator highlights the concern that Google has been using its dominant position to unfairly favour its own services.
The CMA alleges that the vast majority of publishers and advertisers rely on Google’s ad tech services to bid for and sell advertising space. The accusation by the regulator is that Google leveraged this reliance to disadvantage competitors and stifle competition.
“We’ve provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites,” said the CMA’s Enforcement Interim Executive Director, Juliette Enser. “Many businesses are able to keep their digital content free or cheaper by using online advertising to generate revenue. Adverts on these websites and apps reach millions of people across the UK – assisting the buying and selling of goods and services.
“That’s why it’s so important that publishers and advertisers – who enable this free content – can benefit from effective competition and get a fair deal when buying or selling digital advertising space.”
UK CMA Google objections
The regulator’s probe focused on Google’s role as an intermediary in the digital advertising technology sector, often referred to as the ‘ad tech stack.’ Within this framework, Google operates two ad-buying tools for advertisers, namely Google Ads and DV360, as well as a publisher ad server called DoubleClick For Publishers (DFP).
Additionally, Google runs an ad exchange, AdX, where it charges some of the highest fees within the ad tech stack.
The CMA’s provisional findings conclude that since at least 2015, Google has abused its market position by using its buying tools and publisher ad server to bolster AdX’s market position and protect it from competition.
It also identified several practices that have given AdX an unfair advantage over rival exchanges. These include providing AdX with exclusive or preferential access to advertisers using Google’s platforms and manipulating advertiser bids to increase their value in AdX’s auctions compared to those of rival exchanges.
Furthermore, Google allowed AdX to bid first in auctions run by DFP for online advertising space, thereby effectively granting it a right of first refusal.
The CMA said that Google’s practices have hindered competing ad servers from effectively challenging DFP and, as a result, stifled competition in the ad server market.
According to the competition watchdog, Google’s anti-competitive behaviour of this nature is ongoing. As a result, the CMA is considering actions necessary to ensure that the tech major stops these practices and does not engage in similar conduct in the future.
The CMA intends to review representations from Google before reaching a final decision on the matter.
In its 2019 market study on digital advertising, the regulator reported that advertisers were spending approximately £1.8bn each year on open-display ads to promote goods and services through apps and websites to UK consumers.
Search giant under investigation in US, EU
Google’s activities in the ad tech sector are also under investigation by the US Department of Justice (DoJ) and the European Commission (EC), and these proceedings are still in progress.
The US DoJ is also scrutinising Google’s AI strategy to tackle the tech company’s search monopoly. In line with this, the department aims to understand Google’s AI approach better to identify potential changes it may require to curb its market dominance. This development followed a recent federal court hearing where Judge Amit Mehta ruled Google to be an illegal monopolist, marking the end of the initial phase of the antitrust trial.
Read more: UK CMA approves Microsoft’s partnership with Inflection AI
