The U.K. government says Google is abusing its dominant position in the ad tech sector

The UK’s Competition and Markets Authority has provisionally ruled that Google’s dominance of the ad tech market is detrimental to competitors – and the tech giant could be fined up to 10% of its global annual turnover as a result.

Since at least 2015, the company has allegedly been operating its tools for ad space buyers and sellers, such as Google Ads, in such a way that it protects its ad space auction platform, AdX, from competition. The CMA also says Google is preventing rival ad space listing tools from competing with its own, DoubleClick For Publishers.

Such anti-competitive practices “could harm thousands of U.K. publishers and advertisers.” According to the authority, advertisers spend around £1.8 billion annually on open-display advertising, marketing goods and services to U.K. consumers via apps and websites.

“We provisionally found that Google is using its market power to stifle competition in the ads people see on its websites,” Juliet Ensor, interim acting director of enforcement, said in a report. Press release“Many businesses are able to keep their digital content free or cheap by generating revenue using online advertising. Ads on these websites and apps reach millions of people across the UK – aiding the buying and selling of goods and services.

He added: “It is therefore vitally 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 ad space.”

See: UK regulator treats Microsoft and Inflection AI partnership as a merger, but brushes off competition concerns

Google responded to the allegations

The digital advertising technology sector, known as the “ad tech stack”, consists of various intermediaries that facilitate the sale of online ads. Google owns four of these: Google Ads, DV360, AdX, and DoubleClick For Publishers.

Both Google Ads and DV360 are used by advertisers to bid for ad spaces on websites and apps. DoubleClick For Publishers is a platform for managers of websites and apps where they can list their available ad space. AdX connects the two by matching the website or app manager with the highest bidding advertiser in a real-time auction.

The CMA says Google has blocked competition with AdX and DoubleClick for Publishers in a number of ways, including:

• Providing special or preferential access to AdX to advertisers who use the Google Ads platform.
• Manipulating advertiser bids so that they are worth more when submitted in AdX’s auction than when submitted in auctions on rival ad exchange platforms.
• Allowing AdX to bid first in auctions conducted by DoubleClick for Publishers for online advertising space, meaning that competitors will not have the opportunity to submit bids.

Google’s vice president of global ads, Dan Taylor, responded to the allegations through a statement. TechCrunchHe said the case was based on “flawed interpretations of the ad tech sector.”

“Our ad technology tools help websites and apps raise money for their content, and enable businesses of all sizes to effectively reach new customers,” Taylor said.

The CMA has only issued a statement of objections and has not ruled that Google is violating the Chapter II provision of the Competition Act 1998, which prohibits abuse of dominant position affecting trade within the country. It will consider Google’s representations and suggest what action the search giant can take to stop its ongoing anti-competitive practices.

Google’s working system was checked many times

The CMA’s investigation has been combined with an investigation into Google’s abuse of its powers. Leading position in header bidding servicesWhich was opened in March 2022. Header bidding is a service that allows websites to offer their ad space to multiple buyers at the same time.

Google intends to appeal a U.K. court ruling in June that allowed a lawsuit by Ad Tech Collective Action LLP to proceed to trial. The group of online publishers alleges Google abused its dominant position in the digital advertising technology sector, causing it to lose 13.6 billion pounds.

But the UK isn’t the only country that has raised objections to Google’s ad tech practices. The US Department of Justice and state attorneys general launched an antitrust investigation in 2020The suit alleges that Google “illegally used distribution agreements to thwart competition.” That investigation is still ongoing.

A federal judge ruled in August that the technology company had a monopoly on general search services and text advertising and had violated anticompetition law.

The European Commission also told Google that “Compulsory Disinvestment” In March, the company expressed a preliminary opinion that it had violated EU anti-competition rules, and that selling a portion of its ad tech business would be the only way for the company to address its competition concerns.

The EU is continuing to investigate the way Google complies with the new Digital Markets Act. Regulators say it is promoting its own services above third-party services in search results and is therefore “gatekeeping”.

In March, Google temporarily removed some search widgets, such as Google Flights, to allow greater access to individual businesses after the DMA came into effect.