UK competition watchdog opens 2nd probe in Google's ad tech dominance

London, May 26

The UK competition watchdog on Thursday opened a second investigation into Google's unfair practices in ad tech, following the launch of a probe into Google and Meta's 'Jedi Blue' agreement.

The Competition and Markets Authority (CMA) is investigating whether Google has broken the law by restricting competition in the digital advertising technology market.

Advertising technology intermediation, also known as the 'ad tech stack', is a complex set of services which facilitate the sale of online advertising space between sellers (publishers, like online newspapers and other content providers) and buyers (advertisers).

In 2019, UK advertisers spent around 1.8 billion pounds on this kind of online advertising.

Google has strong positions at various levels of the ad tech stack, charging fees to both publishers and advertisers, the CMA said in a statement.

"We're worried that Google may be using its position in ad tech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers," said Andrea Coscelli, the CMA's Chief Executive.

"This would be bad for the millions of people who enjoy access to a wealth of free information online every day," he added.

The CMA is assessing whether Google's 'ad tech stack' practices may distort competition.

These include whether Google limited the interoperability of its ad exchange with third-party publisher ad servers and/or contractually tied these services together, making it more difficult for rival ad servers to compete.

The CMA is also concerned that Google may have used its publisher ad server and its DSPs (demand side platforms) to illegally favour its own ad exchange services, while taking steps to exclude the services offered by rivals.

"Weakening competition in this area could reduce the ad revenues of publishers, who may be forced to compromise the quality of their content to cut costs or put their content behind paywalls. It may also be raising costs for advertisers which are passed on through higher prices for advertised goods and services," said Coscelli.

The European Commission (EC) has launched its own investigation into Google's practices in the ad tech sector.

Google practices are also the subject of a complaint by the state of Texas (and other US states) currently in the US courts.

In July 2021, the French regulator closed a similar case against Google having imposed a fine and secured commitments.