The findings by the Competition and Markets Authority (CMA), a non-departmental UK government agency that oversees corporate activity and potentially unfair competition, could foreshadow a ruling against Google or further regulatory challenges to come. Google already lost a US antitrust case earlier this year over anticompetitive conduct in its search business.
“We have provisionally found that Google is using its market dominance to hinder competition in the adverts that users see on websites,” the CMA’s interim enforcement director, Juliet Enser, said in a statement, explaining that Google was abusing its dominant position in online advertising to put its own business interests ahead of those of its competitors.
The CMA said Google’s unfair practices across a wide range of online advertising sectors had led to “a large number of publishers and advertisers using Google’s adtech services to bid for and sell advertising space”.
Google is facing similar charges in a U.S. antitrust trial that began on the 6th (local time). The U.S. Department of Justice (DoJ) and 17 states are claiming that Alphabet is operating an illegal monopoly by monopolizing several digital advertising technology products by neutralizing or eliminating competitors.
Google denies the allegations, saying it did not force users to use its advertising technology and that the service was successful because it was effective. Google made more than $200 billion (about 268.8 trillion won) in revenue through its advertising business last year.
‘Self-interest’ limits competition
According to the CMA, there are several intermediaries in the digital advertising market that mediate the sale of online advertising space on websites or mobile apps. These intermediaries connect publishers (sellers) who provide advertising space with advertisers (buyers) who purchase space.
Google acts as an intermediary in three key parts of the advertising chain. It operates Google Ads and DV360, which are ad-buying tools for advertisers; it provides DoubleClick for Publishers (DFP), a publisher ad server for publishers; and it also operates Ad Exchange (AdX), an ad exchange that receives bid requests from publishers and bid responses from advertisers and conducts auctions.
The CMA’s preliminary findings relate to Google’s anti-competitive ‘self-favoritism’. According to the CMA, Google has abused its dominant position through its buying tools and publisher ad server operations to strengthen AdX’s market position and protect it from competition from other exchanges since at least 2015.
Additionally, the court tentatively determined that the highly integrated nature of Google’s advertising technology business hindered market competition by making it impossible for competing publisher ad servers to compete effectively with DFP.
Ensor argues that Google’s practices are damaging to companies that make money through online advertising and want to provide digital content for free or at a low cost. If they are not paid a fair price or are unable to compete on equal terms with the tech giants, it ultimately harms millions of users across the UK who consume content.
Legal pressure increases
Deepti Sekri, practice director at Everest Group, said the CMA’s interim findings were another “brick in the wall of legal scrutiny” facing companies that dominate certain technology sectors, including Google and Microsoft.
“Such a decision could prompt other European regulators to take similar action,” Sekri added. “Furthermore, the findings of European or UK authorities could influence the outcome of the Justice Department case by providing evidence and strengthening the case for regulatory change.”
Google already lost the largest antitrust case in the United States in August, when Judge Amit Mehta ruled that Google had acted anticompetitively to protect its search business. Mehta’s ruling explicitly called Google a “monopoly” that “acted like a monopoly to maintain its monopoly.”
If the CMA’s findings are any indication, the second antitrust trial to begin in the U.S. could see the same result. But Sekri said, “While government-led antitrust litigation can be helpful in applying pressure and holding companies accountable, it often fails to bring about significant changes in companies’ business models and market dynamics.”
“These regulations often result in superficial changes, such as minor adjustments to products or partner agreements, without fundamentally reducing dominance,” he added. “Despite these limitations, regulatory efforts raise market awareness, encourage the adoption of open standards, and set a precedent that can drive more impactful changes in the future.”
editor@itworld.co.kr
Source: www.itworld.co.kr
