Google hit by second UK antitrust probe into online ad dominance

KEY POINTS

• The Competition and Markets Authority is assessing whether Google's role in the ad tech industry may be distorting competition.
• It's the second major antitrust probe targeting Google's ad practices in the U.K.
• The CMA wants powers to scrutinize anti-competitive behavior from tech giants more closely under a new regulatory body.

The entrance to Google's U.K. offices in London.

Olly Curtis | Future Publishing | via Getty Images

The U.K.'s competition regulator has opened a fresh investigation into Google, taking aim at the company's role in the advertising technology market.

It's the second major antitrust probe to target Google's ad practices in the U.K. The Competition and Markets Authority launched a separate investigation with the European Union into Google and Facebook parent company Meta earlier this year over concerns that a 2018 pact between the two companies — known as "Jedi Blue" — restricted competition in digital advertising.

The CMA said Thursday it was assessing whether Google's role in the ad tech industry may be distorting competition. The internet giant is a dominant player in the online ad market.

Google acts as both a demand-side platform, which offers publishers' ad inventory to marketers, and an ad exchange, which lets advertisers compete for advertising space on publishers' websites, the CMA said. It also runs ad servers which manage publishers' inventory.

Regulators are concerned Google may have illegally favored its own ad exchange services to the detriment of rivals. The CMA is also worried Google limited the compatibility of its ad exchange with third-party ad servers to make it harder 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 comes after an earlier competition probe from both the U.K. and EU into "Jedi Blue." The deal allegedly involved Google and Meta rigging auctions for online ads and illegally fixing prices.

The CMA wants more powers to scrutinize anti-competitive behavior from tech giants under a new regulatory body called the Digital Markets Unit. The new regulator, proposed in 2020, would have the power to impose fines of up to 10% of tech companies' global annual revenues for breaching new digital rules. However, the government has yet to give the watchdog powers to impose these fines.