Google is facing further scrutiny over its ad tech practices after the U.K. competition regulator found the company was abusing its dominant market position.
In a statement of objections, the Competition and Markets Authority said Google was harming competition in the country “by using its dominance in online display advertising to favor its own ad tech services.”
The regulator argues that, since 2015, Google has strengthened its AdX ad exchange by taking advantage of its dominant position in the sector as the operator of Google Ads and the DV260 ad-buying tool and publisher ad server DoubleClick For Publishers.
The CMA said AdX is at the heart of the company’s ad tech stack and is the platform on which it charges advertisers the most — about 20 percent of each bid for ad space processed there.
The CMA provisionally found that “the vast majority of publishers and advertisers use Google’s ad technology services to bid for and sell ad space on websites”.
“By prioritising its own services, Google harms competitors and prevents them from competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports the growth of their business,” the CMA said.
The Statement of Objections gives Google a chance to respond and the CMA will consider those representations before making a final decision.
A case decision group consisting of three people (none of whom were involved in the initial investigation or sending the Statement of Objections) will be formed. If the CMA ultimately determines that Google has breached competition rules, it could fine the company up to 10 per cent of its global annual revenue and order legally binding changes to the ad technology business.
Google Ads vice president Dan Taylor said Google disagreed with the decision and would “respond accordingly”. “Our ad technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” Taylor told CNBC in a statement.
“Google is committed to creating value for our publisher and advertiser partners in this highly competitive field. The core of this case is based on flawed interpretations of the ad tech sector.”
Elsewhere, regulators have taken aim at Google’s position in the ad tech sector. The European Commission accused the company in June last year of “abusive behavior” in the online advertising sector. The EC said a potential order for Google to implement measures may not be enough to resolve those behaviors. That could lead to the EU breaking up Google’s advertising business.
Meanwhile, the Justice Department and Google are set to face off in a trial starting Monday. The agency has called for breaking up the company’s ad tech business, citing Google’s alleged illegal monopoly in that market. Google failed in an attempt to get the case dismissed. Last month, a federal judge ruled that Google illegally abused its monopoly over the search industry after a lawsuit stemming from a separate DOJ lawsuit.