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UK watchdog finds Google provisionally guilty of restricting online ad competition
Tuesday September 10, 2024. 02:53 AM , from ComputerWorld
As the second of two antitrust trials against Google begins in the US, a UK competition oversight group has provisionally found that the search giant is guilty of using its online platform dominance to restrict advertising competition for other UK publishers and advertisers.
The finding by the Competition and Markets Authority (CMA), a non-ministerial department in the UK government that oversees business activities and flags potentially unfair competition, could foreshadow a ruling against Google or even further regulatory trouble in the future. Google already has lost one US antitrust case earlier this year for anticompetitive behavior in its search business. “We’ve provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites,” said Juliette Enser, interim executive director of enforcement at the CMA, in a statement. Google is manipulating its unique position in the online advertising space to prioritize its own business interests over competitors’, she said. As a result of Google’s unfair practices in its various roles in the multi-faceted online advertising sector, “the vast majority of publishers and advertisers use Google’s ad tech services in order to bid for and sell advertising space,” the CMA found. Google faces a similar charge in the antitrust trial against its parent company, Alphabet, that began Monday in the US. The US Department of Justice (DoJ), along with 17 states, claims that Alphabet has monopolized multiple digital advertising technology products by neutralizing or eliminating its competitors, and thus is operating an illegal monopoly. The company has denied the charges, maintaining that the company does not force people to use their advertising technologies, and attributing the services’ success to their effectiveness. Google’s ad business brought in more than $200 billion last year. “Self-preferencing” limits competition As the CMA explains it, digital advertising has various intermediaries that facilitate the sale of online advertising space on websites or mobile apps between two key parties: sellers, aka publishers, and buyers, aka advertisers. Google acts as an intermediary in three key parts of the advertising chain: It operates ad-buying tools for advertisers, Google Ads and DV360; it provides a publisher ad server for publishers, DoubleClick For Publishers (DFP); and also operates an ad exchange, AdX, that receives requests for bids from publishers and responding bids from advertisers, and then conducts an auction to match these two sides. The provisional findings by the CMA relate to anti-competitive “self-preferencing” by Google. Since at least 2015, Google has abused its dominant positions through the operation of both its buying tools and publisher ad server in order to strengthen AdX’s market position and to protect AdX from competition from other exchanges, according to the CMA. Moreover, due to the highly integrated nature of Google’s ad tech business, the CMA has provisionally found that Google’s conduct has also prevented rival publisher ad servers from being able to compete effectively with DFP, harming competition in this market. Google’s practices harm the businesses that aim to keep their digital content free or cheaper by using online advertising to generate revenue, Enser said. If they are not receiving fair pricing or able to compete on equal footing with the tech giant, it ultimately harms the millions of people across the UK who consume the content. Legal pressures mount The CMA’s provisional finding is yet another “brick in the wall of mounting legal scrutiny” that companies, such as Google and Microsoft, that dominate certain tech sectors are facing, noted Deepti Sekhri, practice director, Everest Group. “Such decisions could prompt similar actions from other European regulatory bodies,” he said. Moreover, any findings by European or UK authorities also could influence the outcome of the DoJ case by “providing supporting evidence and strengthening the argument for regulatory changes.” Google already lost what so far was the biggest US antitrust battle of the century in August, when Judge Amit Mehta ruled that the company had engaged in anticompetitive behavior in an effort to protect its search business. His ruling outright called Google “a monopolist” that has “acted as one to maintain its monopoly.” If the CMA’s findings are any indication, the antitrust trial that began Monday could have the same outcome. However, while government-led antitrust cases serve to “create pressure and drive some accountability,” they often “fall short of resulting in significant changes to [the company’s] business models and market dynamics,” Sekhri noted. “They often lead to superficial changes, such as minor tweaks in offerings or partner contracts, without fundamentally reducing dominance,” he said. “However, despite these limitations, such regulatory efforts raise market awareness, encourage the adoption of open standards, and set precedents that could push for more impactful changes in the future.”
https://www.computerworld.com/article/3511453/uk-watchdog-finds-google-provisionally-guilty-of-restr...
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