UK Competition Regulator Accuses Google of Anti-competitive Ad Practices

• The Competition and Markets Authority (Britain's competition watchdog) objected to Google's ad tech practices, accusing it of hindering competition in the country.
• The CMA feels that Google is abusing its market dominance to prevent rival ad services from getting a fair chance.
• Google doesn't agree with these accusations and has decided to respond accordingly.
• It believes that users choose Google ad services simply because they're better, not because they're manipulated into choosing them.

On Friday last week (September 6), the Competition and Markets Authority (Britain's competition watchdog) issued a statement objecting to Google's ad tech practices. It feels that Google's practices are hindering healthy competition in the UK.

Google has harmed competition by using its dominance in online display advertising to favor its own ad tech services."

One of the key accusations in the statement is self-preferencing". The CMA believes that Google prefers its own service when it comes to deciding which ads will be shown to users on a website. This is preventing other ad services from having a fair playing field.

The CMA further noted that Google's ad service is one of the biggest in the country; thousands of publishers and advertisers use it to buy and sell ad spaces. In fact, as of 2019, advertisers are spending close to 1.8 billion annually on the platform.

So, it's only fair that an industry with so much financial potential is equally open to all instead of being hijacked by one tech giant.

Fair for Publishers & Advertisers

Creating healthy competition is not just important for other ad services but also for publishers and advertisers.

As Juliette Enser, interim executive director of enforcement at the CMA, notes, many digital creators are able to provide their content for free because they make revenue from serving digital ads.

Hence, it's important that these publishers get a fair deal and the best price in the market - and that can only happen when there is enough healthy competition in the industry.

What Does Google Have to Say about This?

Google has called all the findings of the CMA flawed". Google says that publishers and advertisers choose its ad service because it's genuinely good.

It has better financial incentives, its products work well, and helps businesses grow. All things considered, Google has decided to challenge the accusations.

The core of this case rests on flawed interpretations of the ad tech sector. We disagree with the CMA's view and we will respond accordingly." - Dan Taylor, Google's vice president of global ads

The CMA is also waiting to hear from Google's representatives before deciding what to do next. If the company is finally found guilty of breaching the competition laws, the agency has the right to impose a fine of up to 10% of annual worldwide group turnover and issue legally binding directions to the firm.

Accusations within the US

The UK isn't the first or the only one to accuse Google of using unfair ad practices. In 2020, the Department of Justice, the state of Texas, and nine other states sued Google for anti-competitive practices in the online advertising industry.

A similar complaint has also been fined by the EU. In fact, in 2023, EU regulators also suggested that Google might need to sell off parts of its ad business.

Google is also fighting a separate antitrust case in the UK where the tech giant is accused of acting in an anti-competitive manner that has caused UK publishers to lose money.

Plus, a US judge recently declared that Google has illegal monopoly over the search engine industry. Google is a monopolist, and it has acted as one to maintain its monopoly," the ruling said.

So, it looks like Google is surrounded by hot waters at the moment. Plus, if so many agencies and governments are accusing it of the same mistake, i.e., abusing its dominance, how long can it keep denying the allegations? Stay tuned to find out.

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