UK watchdog accuses Google of anti-competitive behaviour in digital advertising industry

LONDON (AP) — Google was sharply criticized Friday by British regulators who say the company is using its dominant position in the digital advertising market to stymie competition in the U.K., increasing pressure the tech giant is facing on both sides of the Atlantic over its “advertising technology” business practices.

The UK Competition and Markets Authority said the US company was favouring its own services to the detriment of online publishers and advertisers in the UK’s £1.8 billion ($2.4 billion) digital advertising market.

Google is a major player in the digital advertising ecosystem, providing servers for publishers to manage ad space on their sites and apps, tools for advertisers and media agencies to buy display ads, and a marketplace where both parties can buy and sell ads in real time through auctions.

“We have made a preliminary determination that Google is using its market power to hinder competition in the advertising that people see on websites,” Interim Executive Director of Enforcement Juliette Enser said in a press release.

The watchdog’s accusations, known as a statement of objections, come two years after the investigation began. European Union antitrust authorities have also been Google’s ad bidding services, and they have also been the subject of antitrust lawsuit brought by the state against Google which is set go to trial this month.

The CMA said Google’s “anti-competitive” conduct continued, but the company denied the accusations on Friday.

“Google remains committed to creating value for our publishers and advertising partners in this highly competitive sector,” the company said in a prepared statement. “At the heart of this case is based on misinterpretations of the ad tech industry. We disagree with the CMA’s view and will respond accordingly.”

The UK watchdog has accused Google of using its dominance since 2015 to strengthen the market position of its own ad exchange, AdX, and shield it from rivals. AdX is where Google charges the most in the ad tech system, taking about 20% of the value of listings, the CMA said.

The regulator’s accusations include allegations that Google manipulates advertisers’ bids so that they have more value when they enter AdX auctions than rival exchanges. AdX can also bid first in auctions run by Google’s publisher ad server, potentially excluding rivals from bidding, the watchdog said.

Google now has a chance to respond to the allegations. The CMA said it was considering what was needed to ensure Google stopped its anti-competitive practices. It could impose a fine of up to 10% of the company’s annual global revenue.