Google struck by double U.K. antitrust inquiry into online ad dominance

Google struck by double U.K. antitrust inquiry into online ad dominance

May 31, 2022: -The U.K.’s competition regulator has opened a fresh investigation into Google, aiming at the company’s role in the advertising technology market.

It’s the next major antitrust probe to target Google’s ad practices in the U.K. The Competition and Markets Authority is launching a different investigation with the European Union into Google and Facebook parent company Meta over concerns that a 2018 pact between the two companies known as “Jedi Blue” restricted competition in digital advertising.

On Thursday, the CMA said it was assessing if Google’s role in the ad tech industry may be distorting competition. The internet giant is a massive player in the online ad market.

The CMA said that Google acts as a demand-side platform that offers publishers’ ad inventory to marketers and ad exchange, letting advertisers compete for advertising space on publishers’ websites. It is running runs ad servers that manage publishers’ inventory.

Regulators are tensed that Google may have illegally favored its ad exchange services to the detriment of rivals. The CMA is even worried that Google limited its ad exchange compatibility with third-party ad servers to make it challenging for competing for ad servers to compete.

“Weakening competition in this area could reduce publishers’ ad revenues, who may be forced to deal with the quality of their content to cut costs or put their content behind paywalls,” Andrea Coscelli, the chief executive of CMA, said.

“It may also raise costs for advertisers, which are passed on through higher prices for advertised goods and services.”

It comes after a competition probe from the U.K. and E.U. into “Jedi Blue.” The deal allegedly involved Google and Meta, which rigs auctions for online ads and illegally fix prices.

The CMA wants even more powers to investigate anti-competitive behavior from tech giants under a unique regulatory body named the Digital Markets Unit. The current regulator would have the power to put fines of up to 10% of tech companies’ global annual revenues for breaching could not digital rules. Although, the government has yet to give the watchdog powers to set these fines.

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Google struck by double U.K. antitrust inquiry into online ad dominance