The UK’s antitrust regulator, the Competition and Markets Authority, has today launched an investigation into whether Google has abused its dominant position in ad tech. The CMA is specifically investigating whether Google’s dominance across the ad tech supply chain creates an unfair advantage, and whether Google has intentionally abused its position to reinforce its dominance.
This marks the second investigation into Google’s advertising business launched by the CMA this year. The first is looking specifically at Google’s ‘Jedi Blue’ deal with Meta, whereby Google allegedly gave Meta preferential treatment in its ad exchange auctions, in exchange for Meta agreeing to wind down its header bidding product.
The new investigation will take a more broad look at Google’s various ad tech products, each of which have grown to dominate their respective roles in the ad tech ecosystem, and examine if there are any signs of foul play.
To do this, the CMA will examine three parts of the market – demand-side platforms (DSPs), ad exchanges, and publisher ad servers – where the CMA says Google owns the largest service provider.
The watchdog says it will assess whether Google’s practices in these parts of the ad tech stack 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 says it is also concerned that Google may have used its publisher ad server and its DSPs to illegally favour its own ad exchange services, while taking steps to exclude the services offered by rivals.
“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 Conscelli, chief executive of the CMA. “This would be bad for the millions of people who enjoy access to a wealth of free information online every day. 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.”
All eyes on ad tech
If Google executives weren’t too familiar with the CMA two years ago, they will be now.
The two investigations launched this year follow an earlier probe into the tech giant’s Privacy Sandbox, the result of which was the CMA securing a number of commitments from Google and gaining an active role in shaping the Sandbox.
This latest probe is just another policy headache for Google, added to an ever-growing list on antitrust complaints and legislative threats.
But while Google is no stranger to competition scrutiny, recent efforts have had a distinct ad tech flavour which has often been missing in the past. Alongside the CMA’s two ad tech investigations, the EU has also launched a probe into the Jedi Blue deal. And a bill introduced into the US Senate last week would force Google to divest its ad tech stack, if passed.