Google Might Have Breached Competition Law Over Digital Ads, U.K. Watchdog Says — 2nd Update

By David Sachs and Mauro Orru

U.K. antitrust officials said Alphabet's Google might be stifling competition by favoring its own ad tech services that advertisers and publishers use to bid for and sell advertising space, adding to growing regulatory scrutiny as the search engine giant faces similar probes elsewhere in Europe and the U.S.

Britain's Competition and Markets Authority said a preliminary investigation had found that most publishers and advertisers use Google's ad tech services and officials are concerned the company is leveraging its position to favor its own services, preventing rivals from competing on a level playing field to provide publishers and advertisers with alternatives.

"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.

The charge from U.K. officials comes as Brussels and Washington are also looking at Google's ad-tech business: The European Commission, the European Union's executive arm, said last year that Google was breaching the bloc's antitrust rules by favoring its own online display advertising technology services to the detriment of competing providers. Last year, the U.S. Justice Department filed a lawsuit accusing Google of abusing monopoly power in digital-ad brokering.

Google's Vice President of Global Ads, Dan Taylor, said in a statement that the company disagreed with U.K. officials as the core of the case rests on flawed interpretations of the ad tech sector.

"Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers," Taylor said. "Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector."

Advertisers and publishers rely on ad tech services for the placement of ads, such as banner ads on websites belonging to news outlets. Companies like Google act as intermediaries that facilitate the sale of advertising space between publishers and advertisers.

Britain's antitrust regulator said that Google abused its dominance of the online advertising technology industry since at least 2015, and officials are now considering how to act to ensure that Google ceases what they called anti-competitive practices.

The CMA said Google operates two ad buying tools for advertisers known as 'Google Ads' and 'DV360' as well as an ad server known as 'DoubleClick For Publishers.' It also operates an ad exchange known as 'AdX' that receives requests for bids from publishers and responding bids from advertisers. Officials alleged that Google leverages both its buying tools and publisher ad server to favor its own ad exchange and shield it from competitors.

"Many businesses are able to keep their digital content free or cheaper by using online advertising to generate revenue," the CMA's Enser said. "That's why 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."

Write to David Sachs at david.sachs@wsj.com and Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

September 06, 2024 07:24 ET (11:24 GMT)

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