The UK’s antitrust watchdog started a new investigation of Alphabet Inc.’s Google, over suspicions it may have abused its dominant position across its ad tech that goes to the heart of the tech giant’s business model.
The move by the Competition and Markets Authority opens a fresh front in its regulatory tussle with Google. The CMA said it was concerned Google sought to illegally favor its own ad exchange services, while taking steps to exclude the services offered by rivals.
“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 pay walls,” said Andrea Coscelli, the CMA’s Chief Executive Officer.
How Google’s ad ecosystem works
Watchdogs around the world have started to home in on the huge power that firms such as Google and Meta’s Facebook wield over ad markets — striking at the heart of the tech giants’ money making machines. Google faces a separate probe by the CMA into possible collusion over the way it operates online display advertising services.
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The CMA has been examining the way Google buys and sells advertising since at least 2020, saying that its advertising stack is a potential conflict of interest. It’s called for powers that would even allow for a structural changes.
“Advertising tools from Google and many competitors help websites and apps fund their content, and help businesses of all sizes effectively reach their customers,” Google said in a statement. “When publishers choose to use our advertising services, they keep the majority of revenue.”