Google’s participation in the ad tech business is being investigated again by the Competition and Markets Authority (CMA), the UK’s competition watchdog, to see if it is distorting competition. It’s the UK’s second major antitrust investigation into Google’s ad tactics. Under a new regulatory agency, the CMA seeks expanded ability to probe anti-competitive activity by digital firms.
Back in March, the CMA said that it will look into a Google-Facebook ad contract known internally as ‘Jedi Blue.’ The acquisition is also included in a significant antitrust case filed by the US State of Texas against Google’s ad tech. Last year, the CMA launched an investigation into Google’s ad-related Privacy Sandbox plan, prompted by complaints about the company’s planned deprecation of tracking cookies in order to migrate to an alternative stack of ad targeting technologies.
This is a development that is still under external scrutiny following a settlement between Google and the regulator that appears to have slowed the pace of any switch. Google has also lately changed its stance on ad targeting, emphasizing topic-based rather than cohort-based targeting.
The CMA’s latest investigation into Google focuses on what it calls Google’s “strong” positions in ad tech intermediation, also known as the ad tech stack, which the regulator believes may be distorting competition because the tech giant owns the largest service provider in three key parts of the chain.
DSPs (demand-side platforms), which enable advertisers and media agencies to buy publishers’ available ad space from a variety of sources; ad exchanges, which provide the technology to automate the sale of publishers’ ad inventory via real-time auctions; and publisher ad servers, which manage publisher inventory and determine which ad to show based on bids received from exchanges and/or direct deals between publishers and ad networks are the areas where it will be looking into Google’s dominance.
A lack of transparency was one of many troubling qualities identified by the CMA as limiting competition in the ad market in its 2020 research, which it claimed made it difficult for market players to “understand or contest how choices are made and to exercise choice effectively.”
Under a new regulatory entity dubbed 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 sales. The government, on the other hand, has yet to give the watchdog the authority to levy these fines.
