Tuesday, May 28, 2024

Google hit with new UK investigation over ad tech dominance in 2022

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The CMA said it was concerned Google sought to illegally favor its own ad exchange services while taking steps to exclude the services offered by rivals.

UK antitrust watchdog has launched a new Google investigation of Alphabet Inc., over allegations that it may have misused its prominent position in all of its advertising technology that penetrates the heart of the tech giant business model.

The move by the Competition and Markets Authority opens a fresh front in its regulatory tussle with Google. The CMA said it was concerned Google sought to illegally favor its own ad exchange services while taking steps to exclude the services offered by rivals. 

Andrea Coscelli, CMA’s Chief Executive Officer said 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. 

The CMA said Thursday it was assessing whether Google’s role in the ad tech industry may be distorting competition. The internet giant is a dominant player in the online ad market. 

Google acts as a platform for demand, providing publishers ‘property to advertisers, as well as an ad exchange, allowing advertisers to compete for advertising space on publishers’ websites, says the CMA. It also uses ad servers that control the publisher list.

The CMA examines whether Google’s actions in these areas of the ad technology stack can distort competition. This includes whether Google restricts the interaction of ad exchanges with third-party publisher ad servers and/or binds these services together contractually, making it increasingly difficult for competing advertising competitors.

The CMA also worries that Google may use its publisher server and DSPs to hack its ad exchange services illegally while taking steps to exclude services provided by competitors.

How Google’s ad ecosystem works

Monitors around the world have begun to embrace the power of corporations such as Google and Meta’s Facebook, which they use in the advertising market to hit the core of technology giant monetization. Google is undergoing a separate CMA investigation into possible comparisons on how online advertising services work.

The CMA has been examining how Google buys and sells advertising since at least 2020, claiming that its advertising stack is a potential conflict of interest. It is called a force that will allow even a change of structure.

Google said in a statement that advertising tools from Google and many competitors help websites and apps support your content, and help businesses of all sizes reach their customers more effectively. They also say that when publishers choose to use our advertising services, they save a lot of revenue.

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