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Google advertising dominance investigation overview:
- Who: The Competition and Markets Authority is investigating Google’s online advertising services.
- Why: The CMA says it is concerned that Google illegally favours its own advertising services over its competitors’, stifling competition.
- Where: The UK regulator is conducting the nationwide investigation.
The Competition and Markets Authority (CMA) is reportedly investigating Google again over concerns the tech giant illegally favours its own advertising services over its competitors.
The CMA will reportedly investigate Google’s role in facilitating the sale of online advertising between advertising and sellers. Google charges fees to both publishers and advertisers, engadget reports.
The regulator will look into the manner in which Google sells advertising space, the automation of the sale of publishers’ inventory and how Google’s ad servers determine which advertisements to show users.
The CMA is concerned that Google is potentially able to contractually tie its advertising services together in such a way that users will essentially be forced to use Google’s services, making it increasingly difficult for less powerful rivals to compete in the online advertising market, according to engadget.
Google ad dominance May stifle competition, CMA worries
The Telegraph notes that advertising revenues have changed significantly over the past two decades. Traditionally, advertising revenue had been tied to news publishers but has shifted toward Google and Facebook.
The CMA is concerned about this shift and Google’s potential role in changing the online advertising market, The Telegraph reports. The regulator says this shift may have led to a decline in the quality of local news and unfairly hiked the price of online advertising.
In 2019, businesses in the UK spent £1.8 billion on online advertising, according to the CMA. Google’s UK profits were reportedly £276 million in 2021.
“We’re worried that Google may be using its position in ad tech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers,” CMA’s chief executive Andrea Coscelli told The Telegraph.
As a result, publishers may be incentivised to reduce the quality of their content to save money or to require users to pay to access their content.
The CMA is also investigating potential collusion between Google and Meta to stifle online advertising competition through a 2018 deal that has been dubbed “Jedi Blue.”
Antitrust authorities in the United Kingdom and the European Union are currently examining whether the Jedi Blue deal was intended to exert control over the online advertising market.
Do you think Google has too much power in the online advertising market? Tell us about it in the comments below!
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