As anti-competition investigations probe Google’s dominant role in online advertising, the tech giant’s position may warrant the consideration of structural remedies
Findings flag harmful effects of Google’s market dominance
On September 6th 2024, the UK Competition and Markets Authority (CMA) published its statement of objections, progressing its investigation into Google’s alleged abuse of dominance in the open-display ad tech market. The regulator provisionally found that Google engaged in anti-competitive practices, which resulted in heightened prices for UK publishers and advertisers and barriers to entry for competitors outside the Google ecosystem. According to the CMA, Google has been abusing its dominant position in preferencing its own services, harming opportunities for growth in the sector. Juliette Enser (Interim Executive Director of Enforcement, CMA) stressed the importance of online advertising in generating revenue for online services providers and noted the sustainability of competition in other digital markets relies on effective, fair competition in advertising. The case timeline now allows for Google to offer representations and evidence to justify its actions before a final decision is reached.
Concerns focus on conflicts of interests built into Google’s vertical integration of the ad tech stack
In its findings, the CMA describes how Google has consolidated its position in the ad tech stack through its two ad buying tools, Google Ads and DV360, its central ad exchange, AdX, and its publisher ad server, DoubleClick For Publishers. The regulator’s investigation focused on whether Google’s role as a broker, auctioneer and participant in these auctions resulted in multiple conflicts of interest and therefore enabled it to unfairly favour its own services. The CMA provisionally found that, since at least 2015, Google has used both its buying tools and its publisher ad server to boost AdX’s position in the ad exchange market while simultaneously shielding the exchange from competition. Google’s alleged anti-competitive practices included:
Allowing advertisers that use Google Ads preferential or exclusive access to AdX;
Artificially increasing advertiser bids submitted to AdX auctions, compared to auctions run by rival exchanges; and
Offering AdX a ‘right of first refusal’ priority in auctions run by DoubleClick for Publishers.
The CMA believes this anti-competitive behaviour to be ongoing and underlines its intention to consider remedies or sanctions which ensure Google’s future compliance. Notably, the CMA will have the opportunity to regulate digital advertising markets through its forthcoming powers under the Digital Markets, Competition and Consumers (DMCC) Act. The regulator recently closed its antitrust investigation into the Google Play Store in favour of addressing anti-competitive behaviour through the ex-ante regime. The continuation of this investigation could suggest a lesser priority to address advertising markets under the new law, similar to trends observed under the EU’s Digital Markets Act, though the regulator would also have the option to refer this work to the Digital Markets Unit (DMU) at a later stage.
Objections align with broader regulatory trends, aiming to address distortion and other abuses of dominance in digital ad markets
According to our Platforms and Big Tech Tracker, Google currently faces 13 other ongoing antitrust actions around the world, including a lawsuit regarding its dominance in the ad tech stack brought by the US Department of Justice (DOJ) which began at trial on 9 September 2024. Filed in January 2023, the case alleges that Google maintains monopolistic control over the entire online display ad sector, similar to the CMA’s provisional findings. In response, Google continues to claim that it has created efficient and successful products that face ample and robust competition. The EC similarly informed Google in June 2023 of its preliminary view that the company breached EU antitrust rules through the distortion of competition in digital ads, suggesting that only a structural remedy such as the mandatory divestment by the firm of part of its services would address the concerns identified. With the global regulatory interest in maintaining competition in digital ads given its importance to other digital markets, this could be the most likely context for Google to face structural remedies in the future.
