CMA Finds Google Abuses Ad Tech Dominance

The UK Competition and Markets Authority (CMA) said on Friday it has provisionally found that Google abused its market dominance in advertising technology to favour its own ad tech services in open display advertising.

“The CMA provisionally finds that Google has abused its dominant positions through the operation of both its publisher ad server and buying tools to restrict competition in the UK,” the agency said in a statement.

The CMA’s statement of objections concludes a preliminary investigation that began in May 2022.

The findings relate to how Google allegedly self-preferences its own ad exchange, harming competition and, as a result, advertisers and publishers, the CMA said.

Market dominance

“When placing digital ads on websites, the vast majority of publishers and advertisers use Google’s ad tech services in order to bid for and sell advertising space,” the agency said.

“Google disadvantages competitors and prevents them competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business.”

Juliette Enser, the CMA’s interim director of enforcement, said adverts on websites and apps reach millions of people across the UK.

“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,” she said.

The CMA noted that the US and the European Commission have similar investigations into Google’s ad practices.

Google uses various practices to preference its own AdX exchange and disadvantage competitors, the CMA said, including providing AdX with exclusive or preferential access to advertisers on Google Ads, manipulating advertiser bids so that they have a higher value when submitted into AdX’s auction compared to those of rival exchanges, and allowing AdX to bid first in auctions run by Google’s DFP publisher ad service, effectively giving it a “right of first refusal”, with competitors potentially not having a chance to submit bids.

Multiple cases

The CMA said Google’s practices are ongoing and it is “therefore considering what may be required to ensure that Google ceases the anti-competitive practices and that Google does not engage in similar practices in the future”.

The CMA said it would take feedback from Google into account before before making a final decision, and that the final decision would be made by a different panel from the one that conducted the investigation.

Google said it disagreed and would respond accordingly.

“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” said Google vice president of global ads Dan Taylor.

He said the CMA’s case rests on “flawed interpretations” of the ad tech sector.

The US Department of Justice, along with multiple states, launched a probe into Google’s digital advertising practices in January 2023.

The trial in the US case is set to begin on Monday, 9 September.

The European Commission said in June of last year a “behavioural remedy is likely to be ineffective to prevent the risk” of further abuse in the ad tech sector and that Google may be forced to break up its advertising business from its core services.