CMA Starts Second Investigation into Google’s Adtech Activities

The Competition and Markets Authority is investigating whether Google has broken the law by restricting competition in the digital advertising technology market.

The UK’s Competition and Markets Authority (CMA) has powered up its search engine and unveiled a second investigation into Google’s adtech practices. 

With the nation’s online advertising market valued at around £1.8 billion, the regulator has its eyes firmly set upon advertising technology intermediation, aka the adtech stack. This means a set of services which facilitate the sale of online advertising space between sellers (publishers, like online newspapers and other content providers) and buyers (advertisers).

Andrea Coscelli, the CMA’s Chief Executive, explains: “We’re worried that Google may be using its position in adtech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers.”

This case follows on from the CMA’s market study into online platforms and digital advertising which identified issues and made an assessment of possible solutions.

Google as befits its tech titan status has “strong” positions at various levels of the adtech stack, charging fees to both publishers and advertisers.

The CMA plans to check out key parts of this chain, in each of which Google owns the largest service provider.

The first comprises demand-side platforms (DSPs) that allow advertisers and media agencies to buy publishers’ advertising inventory (i.e., the space they have for advertising).

Next, ad exchanges provide the technology to automate the sale of publishers’ inventory. They allow real-time auctions by connecting to multiple DSPs, collecting bids from them.

Thirdly, publisher ad servers manage the publisher’s inventory and decide which ad to show, based on the bids received from different exchanges and/or direct deals between publishers and advertisers.

  • UK Government Takes on Big Tech with Pro-Competition Regime – read the story here

The CMA wants to determine if Google limited the interoperability of its ad exchange with third-party publisher ad servers and/or contractually tied these services together, “making it more difficult for rival ad servers to compete”.

The regulator is also concerned that Google may have used its publisher ad server and its DSPs to illegally favour its own ad exchange services, while taking steps to exclude the services offered by rivals.

In other news, the CMA seems to be busy.

In March, it opened a competition investigation into Google and Meta’s ‘Jedi Blue’ agreement in relation to header bidding services, which are a part of the wider adtech stack.

As eWeek UK reported in February, the regulator secured “legally binding” commitments from Google to address competition concerns over its Privacy Sandbox.

The issue of big tech (and its large-sized influence) is often in the news.

In May, the UK government revealed its plans to tackle the “unprecedented concentration of power amongst a small number of digital firms”. Plans include targeted pro-competitive interventions and financial penalties.

A draft Bill to give the CMA more powers to govern the behaviour of big tech firms, through the Digital Markets Unit, was recently announced in the Queen’s Speech.

Until this legislation is in place, the CMA says it will forge ahead using its existing powers in the tech sector, including probes into Apple’s App Store, Meta’s use of data and Apple and Google’s mobile ecosystems over competition concerns.

The European Commission has launched its own investigation into Google’s practices in the adtech sector. Google practices are also the subject of a complaint by the State of Texas (and other US States) currently in the US courts. In July 2021, the French Autorité de la Concurrence closed a similar case against Google having imposed a fine and secured commitments.

Antony Peyton
Antony Peyton
Antony Peyton is the Editor of eWeek UK. He has 18 years' journalism and writing experience. His career has taken him to China, Japan and the UK - covering tech, fintech and business. Follow on Twitter @TonyFintech.
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