Google’s ad dominance at risk

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The UK Competition and Markets Authority has launched a new investigation into Google’s advertising activity over concerns the company is unfairly disqualifying competitors.

This is the second CMA investigation against the search giant. It follows the announcement in March of a joint investigation with the European Union into collusion between Google and Meta, referred to as Jedi Blue.

The agency also opened an investigation into Google’s advertising-related privacy protection scheme last year. The plan is to stop tracking cookies and switch to an alternative set of ad targeting technologies.

The new investigation delves into the suite of tools that make up the online advertising market. The authority notes that Google has strong sites at different levels of the ad technology suite.

The commission is considering three main elements, including:

  • Side demand platforms that enable advertisers and media agencies to purchase advertising space available to publishers from multiple sources.
  • Ad exchanges that provide technology to automate the sale of publishers’ ad inventory via auctions in real time.
  • Ad servers that manage publisher inventory and determine which ad to display based on quotes received or direct deals between publishers and advertisers.

In other words, the authority highlights all the key parts that make online advertising work attractive.

Targeting Google’s role in the ad technologies group

The authority wants to know if Google is using its dominance in each separate element to direct customers to its services and make it difficult for competitors to compete.

Potentially suspicious practices include whether Google limits the interoperability of ad exchange with third-party publisher ad servers or has contractually tied these services together, making it more difficult to compete with competing ad servers.

The authority is concerned that the company may have used its publisher ad server and distribution service provider to favor its services for illegally exchanging ads, while taking steps to exclude those offered by competitors.

The CEO said the authority: Weak competition in this area reduces advertising revenue for publishers. Publishers may have to compromise on content quality to cut costs or put content behind a paid subscription system. It may also increase costs for advertisers that are conveyed through higher prices for advertised goods and services.

Over the past few years, the search giant has been subject to various fines from the European Union due to antitrust practices. Including  a €2.4 billion fine in 2017 for favoring its shopping service over competitors in search results. She was also fined 1.5 billion euros in 2019 for anti-competitive behavior in advertising.

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