The Competition Watchdog in Britain has opened an investigation into Google’s alleged violation of the law by restricting the competition in the advertising technology marketplace.
The Competition and Markets Authority will determine if the firm has distorted competition and made it harder for other advertising services to compete.
Virgin Hotels Edinburgh showcases six Scottish startups
According to the regulator, its investigation into Alphabet’s search giant would be focused on advertising technology intermediation (also known as the “ad tech stack”).
Based on 2019, data, this is a collection of services that facilitate the sale and purchase of online advertising space. It is estimated to be worth PS1.8billion per year.
According to the CMA, Google holds a strong position at all levels of this space. This includes platforms that allow advertisers to buy online advertising space and technology that automates the selling of advertising space. Also, Google offers a range of services such as technology that allows publishers to manage their ad inventories which determine which ads will be shown.
Google, a California-based company, offers a wide range of services and charges fees for both buyers and sellers.
CMA stated that it wanted to determine if Google was causing distortions in competition by restricting interoperability of certain services and contractually binding some of its services together, making it harder for other companies to compete.
According to the competition regulator, there were also concerns that Google might have illegally favored its own advertising services and taken steps to exclude others.
Andrea Coscelli, chief executive of CMA, stated that he was concerned that Google might be using its position as an ad tech company to favor its own services at the expense of its competitors, customers, and ultimately consumers.
“This would be bad news for millions of people who have access to free information online every day.
“Weakening competition” in this space could decrease the ad revenue of publishers. Publishers may have to compromise the quality and/or put their content behind paywalls to reduce costs.
Advertisers may be paying more for their goods and services, which could lead to higher advertising costs.
A Google spokesperson responded that advertising tools from Google and other competitors help websites and apps finance their content and help businesses reach their customers effectively.
Google’s tools have helped over 700,000 UK businesses to generate an estimated PS55billion of economic activity. Publishers can also use our advertising services to retain the majority of their revenue.
“We will continue to collaborate with the CMA in answering their questions and sharing the details of how our systems work.”
There are many other players in this market as well, such as Amazon, Abode Oracle, Microsoft and Facebook. Many of these companies also have their own ad tech platforms.
CMA is based in London’s Canary Wharf and launched the probe following its earlier investigation into Meta, the Facebook owner,’Jedi Blue’ arrangement.
The regulation of tech giants in the USA is being strengthened by governments around the globe. This has been done to counter the growing power of these companies during the pandemic. Multiple investigations are underway worldwide into their market positions. This includes the US and EU.
Britain created a new competition system last year to stop Google and Facebook from using their dominance in order to disadvantage smaller businesses and displace customers.
This created a new Digital Markets Unit within CMA that could have the power to block, reverse and suspend decisions made by technology companies and impose financial sanctions for non-compliance.
Companies were advised to be more transparent with consumers about how they use their data, and that advertising practices must adapt to changing consumer expectations.
