Google is facing increased scrutiny over its ad tech practices after the UK competition watchdog provisionally found the company to be abusing its market dominance. In a statement of objection, the Competition and Markets Authority said Google is harming competition in the UK by “using its dominance in online display advertising to favour its ad tech services.”
The watchdog group alleges that since 2015, Google has used its dominant position in the sector as operator of Google Ads and DV260 ad buying tools, as well as publisher ad server DoubleClick For Publishers, to power its AdX ad exchange. The CMA said AdX was the core of the company’s ad tech stack and was the platform on which the company charged advertisers the highest fees – around 20% of each bid for ad space processed there.
The CMA tentatively found that “the vast majority of publishers and advertisers use Google’s advertising technology services to bid for and sell advertising space on their websites.” By prioritizing its own services, “Google puts its competitors at a disadvantage and prevents them from competing on a level playing field to offer publishers and advertisers better, more competitive services that help them grow their businesses,” it said.
The complaint gives Google an opportunity to provide feedback, which the CMA will consider before making a final decision. The case decision group is made up of three people (none of whom were involved in the preliminary investigation or in sending the complaint). If the CMA ultimately finds that Google has breached competition rules, it can fine the company up to 10% of its global annual revenue and order legally binding changes to its ad tech business.
Google disagrees with the decision and will “respond accordingly,” said Dan Taylor, vice president of Google Ads. “Our ad tech tools help websites and apps fund their content and businesses of all sizes effectively reach new customers,” Taylor told CNBC in a statement. “Google remains committed to creating value for our publisher and advertising partner partners in this competitive space. At the heart of this lawsuit is a misinterpretation of the ad tech sector.”
Other regulators have also targeted Google’s position in the ad tech sector. The European Commission accused the company of “abusive practices” in online advertising last June. The Commission said that ordering Google to take corrective measures may not be enough to address those practices, which could lead to the EU dismantling Google’s advertising business.
Meanwhile, the Justice Department and Google are set to go head-to-head in a trial that begins Monday. The Justice Department is seeking to break up Google’s ad-tech business, accusing it of an illegal monopoly in that market. Google has tried unsuccessfully to have the case dismissed. Last month, in a case stemming from a separate Justice Department lawsuit, a federal judge ruled that Google illegally abused its monopoly in the search industry.
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