As Google prepares to battle the U.S. Department of Justice in another trial next week, the UK Competition and Markets Authority alleged Google has “abused its dominant position” in online advertising that favors its own services.
The watchdog stated Friday that the Alphabet-owned company “self-preferences” its business practices and services and “disadvantages competitors,” preventing them from "competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business.”
A preliminary investigation found Google uses anti-competitive practices in display ad technology, and believes these could be harming thousands of UK publishers and advertisers by overcharging them. It also suggests that Google’s practices suppress potential competitors by fixing, in Google’s favor, online ad-bidding marketplaces.
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“Google,” in the filing, refers to Google UK Limited, Google Ireland Limited, Google LLC, and Alphabet.
The allegations sound as if they were picked up out of the charges brought about by the U.S. Department of Justice. The CMA’s investigation focused on Google's role as an intermediary in three key parts of the advertising supply chain.
Google operates two ad-buying tools for advertisers — Google Ads and Google Display & Video 360. For publishers, it operates an ad server known as DoubleClick for Publishers. It also operates an ad exchange, known as Google Ad Exchange (AdX).
The filing states that ad exchanges receive requests for bids from publishers and responding bids from advertisers, and then conduct an auction to match these two sides. Whether accurate or not, the filing states: “AdX is where Google charges its highest fees in the ad tech stack (approximately 20% of the bid amount).”
The CMA believes Google has a competitive advantage through its AdX platform, and is manipulating advertiser's bids.
The fine for Google, if it is found guilty, could reach 10% of its annual worldwide turnover under the Chapter II provision of the Competition Act 1998, which prohibits the abuse of a dominant position which may affect trade within the UK, according to the filing.