The Competition and Markets Authority (CMA) has issued a provisional statement of objections against Google, alleging the tech giant may have breached competition laws through anti-competitive practices in the ad tech sector. The investigation focuses on Google’s purported abuse of its dominant market position to favour its own ad services, potentially harming UK advertisers and publishers.
According to the CMA’s provisional findings, Google is suspected of using its significant market power to unfairly advantage its own advertising exchange, AdX, thereby limiting competition and disadvantaging rival services. This is said to have led to higher costs for advertisers and reduced competition for publishers who rely on Google’s technology to sell ad space.
The CMA’s concerns centre on Google’s role within the ad tech ecosystem, known as the ‘ad tech stack.’ This system involves various intermediaries that facilitate the sale of digital advertising space. Google operates multiple key components of this stack: Google Ads and DV360 for ad buying, DoubleClick for Publishers (DFP) as a publisher ad server, and AdX as the ad exchange where high fees are charged.
The CMA alleges that Google has engaged in several practices to reinforce AdX’s dominance and undermine competitors. These include:
- Offering AdX exclusive or preferential access to advertisers using Google Ads.
- Manipulating bid values so that ads submitted to AdX receive a higher valuation compared to bids submitted to rival exchanges.
- Granting AdX the first opportunity to bid in auctions managed by DFP, effectively giving it an unfair ‘right of first refusal’ in online advertising auctions.
Juliette Enser, Interim Executive Director of Enforcement at the CMA, commented on the findings: “Our provisional investigation indicates that Google might be using its market power to obstruct competition in the digital advertising space. The integrity of digital advertising is crucial for maintaining free or affordable content online. Ensuring fair competition in this sector is essential for advertisers and publishers alike.”
The CMA’s investigation follows similar scrutiny from regulatory bodies in the US and EU, who are also examining Google’s practices in ad tech.
The investigation has highlighted the complex nature of the ad tech stack, where a rapid series of transactions occur to determine which ads appear on websites and apps. Google’s dominance in both ad buying tools and ad serving, combined with its operation of the high-fee ad exchange, has raised concerns about its potential anti-competitive behaviour.
The CMA is now considering further steps to address these practices and ensure that Google ceases any anti-competitive activities. Google will have the opportunity to respond to the CMA’s provisional findings before a final decision is made.
For more information, visit the CMA’s investigation page on their website here.