The UK’s antitrust watchdog has tentatively found that Google LLC’s business practices in the display advertising market are anticompetitive.
The Competition and Markets Authority, or CMA, published its findings today. In conjunction, the watchdog sent Google a statement of objections over the business practices that were found to violate antitrust rules. Such a statement can lead to fines and, in some cases, an order requiring the company being scrutinized to offload parts of its business.
Google’s display advertising unit provides cloud services that allow publishers to sell ad space on their websites and in their apps to brands. One of those services is AdX, an auction platform through which brands can bid for publishers’ ad space. The CMA’s statement of objections charges that Google unfairly boosts AdX at the expense of competing services.
Publishers sell their online properties’ ad space to brands using a tool known as Google Ad Manager, which was until recently known as DFP. Brands, in turn, make bids for that ad space using two services called Google Ads and DV360. Bids made in the latter two products often go through AdX, the Google-run ad auction platform being scrutinized by the CMA.
The regulator has found that Google is using Google Ads, DV360 and Ad Manager to give AdX an edge over rival services. Officials determined that the company does so in three ways.
Publishers sometimes use AdX together with other ad auction platforms to draw more bids for their ad space. According to the CMA, Google sometimes allows AdX to bid for ad space before those competing platforms, which increases the likelihood that it will win the auction. Moreover, Google was founded to have inflated the value of some bids to further improve AdX’s chances of nabbing ad deals.
The CMA also determined that Google gives AdX “exclusive or preferential” to offers from some advertisers. The more offers an auction platform can secure, the better its chances of submitting the winning bid for a given piece of ad space.
Before taking regulatory action, the CMA will allow Google to submit counterarguments. A final decision on whether breached competition rules were breached will be brought by a three-person panel separate from the CMA team that investigated Google’s display advertising business.
If the panel rules against Google, the search giant could face a fine equal to up to 10% of its global annual revenue. According to TechCrunch, regulators may also consider applying “structural remedies.” That means the CMA could order Google to exit certain parts of the advertising market.
“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” Dan Taylor, Google’s vice president of Global Ads, said in a statement responding to the CMA’s findings. “Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector. The core of this case rests on flawed interpretations of the ad tech sector. We disagree with the CMAs view and we will respond accordingly.”
The development comes as Google also faces antitrust scrutiny in the U.S. On Monday, a Justice Department lawsuit focused on the company’s advertising business will go to trial in Virginia. The complaint accuses the search giant of giving its advertising services an unfair edge over rivals.
The Justice Department won a separate antitrust lawsuit against Google last month. A federal court found that the search giant maintains an illegal monopoly in the search and search text advertising segments. Today, the judge presiding over the case stated that a decision on what steps Google must take to resolve the issue will be brought by next August.