The competition authority in the United Kingdom has launched a new inquiry into Google, focusing on the company’s role in the advertising technology sector.
It’s the UK’s second major antitrust investigation into Google’s ad practises. Earlier this year, the Competition and Markets Authority and the European Union opened a separate inquiry into Google and Facebook parent firm Meta, citing worries that a 2018 contract between the two companies, known as “Jedi Blue,” limited competition in digital advertising.
The CMA announced on Thursday that it was looking into whether Google’s presence in the ad tech business was causing competition to be distorted. The internet behemoth is a market leader in online advertising.
According to the CMA, Google serves as both a demand-side platform that connects marketers with publishers’ ad inventory and an ad exchange that allows advertisers to bid for ad space on publishers’ websites. It also runs ad servers that handle the inventory of publishers.
Regulators are concerned that Google may have favoured its own ad exchange services over competitors. The CMA is also concerned that Google has limited its ad exchange’s compatibility with third-party ad servers, making it more difficult for competing ad servers to compete.
“Weakening competition in this area could reduce the ad revenues of publishers, who may be forced to compromise the quality of their content to cut costs or put their content behind paywalls,” Andrea Coscelli, the CMA’s chief executive, said in a statement.
“It may also be raising costs for advertisers which are passed on through higher prices for advertised goods and services.”
It follows a previous competition investigation into “Jedi Blue” by both the UK and the EU. The arrangement allegedly includes Google and Meta manipulating internet ad auctions and fixing pricing illegally.
Under a new regulatory entity called the Digital Markets Unit, the CMA seeks expanded ability to investigate anti-competitive actions by internet firms. For breaking new digital regulations, the new regulator, envisaged in 2020, will be able to levy fines of up to 10% of IT companies’ global annual revenues. The government, on the other hand, has yet to give the watchdog the authority to levy these fines.
(Adapted from TechCrunch.com)