The United Kingdom’s antitrust regulator, the Competition and Markets Authority, said Google is abusing its dominant position in advertising technology and warned the tech giant of potential hefty fines and an order to change one of Google’s most lucrative businesses, reported Bloomberg on Friday.
Google’s move to prioritise its own services comes at the cost of potentially causing harm to thousands of UK publishers and advertisers, according to the regulator’s statement, quoted in the news report.
Google has held its key position in collecting data on users, which allows advertisers to target ads to them. The tech giant also sells ad space and provides the technology that allows advertisers to find publishers to sell their space.
Google, using its algorithms calculates and offers ad spaces and prices to advertisers and publishers as a user clicks on a web page. The online advertising business of Alphabet is the most lucrative business for the company, generating $225 billion or nearly 80 per cent of the total revenues in 2022, according to the report.
“It’s so important that publishers and advertisers – who enable this free content – can benefit from effective competition and get a fair deal when buying or selling digital advertising space,” said Juliette Enser, the CMA’s interim executive director of enforcement, quoted in the agency report.
Google responded to the CMA’s findings saying they were based on “flawed interpretations of the ad tech sector.” Google disagrees with the findings and will respond to them accordingly, said Dan Taylor, VP of Global Ads at Google, as per the report.
The European Union (EU) has also criticised the tech giant’s dominance in tech advertising. In 2023, it laid antitrust charges against the company, giving preference to its own ad exchange program over rivals and boosting Google’s central role in the tech supply chain, according to the report.
In July 2023, the EU said that a potential order for Google to implement behavioural remedies may not be sufficient to make the abusive conduct right, possibly to open the way for an order to break up its ad tech business from core operations, as per the report.
Google vs DoJ:
Google will face the US Department of Justice (DoJ) in a September trial, calling for the separation of the company’s ad tech business over alleged illegal monopolization, said the report.
The DoJ alleges that the company’s dominance in the ad tech business allows it to keep nearly $0.30 out of every dollar an advertiser spends though its ad tools, according to the report.
In case of wrongdoing uncovered by the CMA, it has the power to impose fines of 10 per cent of the firm’s global revenue. The CMA says it will take any feedback from Google into consideration before its final decision, as per the report.
The decision will be taken by a separate panel from the team that did the initial probe, according to the agency report.
