The UK’s Competition and Markets Authority is lining up yet another investigation into Google over its dominance of the digital advertising market.
This latest inquiry, announced Thursday, is the second major UK antitrust investigation into Google this year alone. In March this year the UK, together with the European Union, said it wished to examine Google’s “Jedi Blue” agreement with Meta to allegedly favor the former’s Open Bidding ads platform.
The news also follows proposals last week by a bipartisan group of US lawmakers to create legislation that could force Alphabet’s Google, Meta’s Facebook, and Amazon to divest portions of their ad businesses.
The bill, called the Competition and Transparency in Digital Advertising Act (CTDA), was introduced on 18 May but has yet to go before the Senate or Congress.
While the joint UK/EU Jedi Blue probe is ongoing, another report titled the “Online platforms and digital market study” was published in 2020, where the CMA found that “competition is not working well in these markets, leading to substantial harm for consumers and society as a whole.”
This result informed the founding of the CMA’s Digital Markets Unit, which aims to get tech megacorps to follow new rules of “acceptable behaviour with competitors and customers.”
Then there’s the “Privacy Sandbox” investigation over Google’s killing of third-party cookies in its Chrome browser, the first quarterly report on which cited no “reportable concerns” yet plenty of concerned feedback.
There have been so many probes stuck in Google regarding online advertising, which forms 80 percent of the company’s revenue, it’s a wonder Mountain View doesn’t look like a pincushion.
So what good is another? This time the CMA is drilling down into advertising technology intermediation, or the “ad tech stack,” which facilitates the sale of online ad space between sellers (publishers) and buyers (advertisers).
The watchdog noted that UK advertisers spent around £1.8 billion ($2.27 billion) on this kind of online advertising in 2019, and said the market is important “because millions of people across the UK use websites that rely on advertising revenue to offer high quality, free content.”
It added: “Google has strong positions at various levels of the ad tech stack, charging fees to both publishers and advertisers.”
There are three key parts of the chain, where Google owns the largest service provider, that the regulator wishes to scrutinize:
The CMA is to assess if Google’s operations in these areas of the market may distort competition, including “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 regulator also expressed concern 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.”
CMA chief exec Andrea Coscelli 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.”
The Register has asked Google to comment. ®