UK watchdog accuses Google of anti-competitive behavior in digital advertising market

Britain's Competition and Markets Authority (CMA) has accused tech giant Google of abusing its dominance in the digital advertising sector, giving preferential treatment to its own services at the expense of online publishers and advertisers.

The allegations come after a two-year investigation into the company’s practices in the UK's £1.8 billion ($2.4 billion) digital ad market, raising further scrutiny on Google’s global operations.

The CMA’s findings could lead to hefty fines for Google or force the company to alter its business practices.

Google controls multiple aspects of the digital ad ecosystem, from providing servers for publishers to managing ad space, to running ad exchanges where real-time auctions are held. According to the regulator, Google's dominance in these areas allows it to stifle competition.

“We've provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites,” said Juliette Enser, the interim executive director of enforcement at the CMA.

The watchdog alleges that since 2015, Google has manipulated its ad exchange, AdX, to strengthen its market position and shut out competitors. The CMA claims Google artificially inflates the value of advertiser bids when they enter AdX auctions, giving its own platform a competitive edge over rivals. Additionally, the regulator argues that AdX is granted first access to bids in auctions run by Google’s publisher ad server, further disadvantaging other exchanges.

Google has rejected these allegations, stating that the CMA's interpretation of the ad tech industry is flawed. "Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector," the company said in a statement.

Google now has the opportunity to respond to the charges before further action is taken.

The CMA has the power to impose fines of up to 10% of Google’s global revenue or issue legally binding orders to stop its anti-competitive behavior.

Meanwhile, Google is also facing similar legal challenges from the European Union and a lawsuit from the US Department of Justice, which is set to go to trial soon.

In the US, a federal judge recently gave the Justice Department until the end of the year to outline potential penalties for Google’s illegal monopolization of the internet search market. Google has been under fire on both sides of the Atlantic, as regulators and lawmakers aim to curb the company’s influence and prevent future market abuses.