The UK’s competition watchdog on Thursday launched a new investigation into Google’s digital advertising businesses.
The investigation, launched by the Competition and Markets Authority (CMA), will look into the tech giant’s practices in advertising technology intermediation, also known as the “ad tech stack,” a set of platforms and tools needed to facilitate the sale of online advertising space between advertisers and content publishers.
According to the CMA, UK advertisers spent around £1.8 billion on such digital advertising in 2019.
The watchdog said Google has a strong position at various different levels of this space, providing a wide range of services including platforms where advertisers can buy online advertising space, technology that automates the sale of advertising space, and those for managing ad inventories for publishers, which decide which ads to show.
The range of services Google offers means it deals with and charges fees to both ad sellers and buyers.
The CMA said it will assess whether Google had distorted competition by practices such as limiting 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 watchdog also said it’s concerned that Google may have used its publisher ad server and its Demand-side platforms to benefit its own ad exchange services and exclude competition.
Andrea Coscelli, the CMA’s chief executive, said, “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.
“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.
“It’s vital that we continue to scrutinise the behaviour of the tech firms which loom large over our lives and ensure the best outcomes for people and businesses throughout the UK.”
In response, a Google spokesperson said: “Advertising tools from Google and many competitors help websites and apps fund their content, and help businesses of all sizes effectively reach their customers.
“Google’s tools alone have supported an estimated £55 billion in economic activity for over 700,000 businesses in the UK and when publishers choose to use our advertising services, they keep the majority of revenue.
“We will continue to work with the CMA to answer their questions and share the details on how our systems work.”
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