• The UK's Competition and Markets Authority (CMA) has provisionally found Google guilty of abusing its dominant position in the digital advertising sector.
• Google's anti-competitive practices in open-display ad tech are allegedly causing harm to UK publishers and advertisers.
• Google disagrees with the CMA's view, arguing that their ad tech tools help fund content and reach new customers.
• If the CMA's findings are confirmed, Google could face a fine of up to 10% of its global turnover and may have to alter its business practices.

The UK's Competition and Markets Authority (CMA) has provisionally found that Google, a unit of Alphabet Inc., has been abusing its dominant position in the digital advertising sector to stifle competition. The CMA's interim executive director of enforcement, Juliette Enser, stated, We've provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites.

The CMA's investigation has provisionally found that Google's anti-competitive practices in open-display ad tech are causing harm to thousands of UK publishers and advertisers. The regulator has outlined how Google may have violated competition law by operating both its publisher ad server and buying tools in a way that uses its dominance in the open-display advertising market to favour its own ad tech services.

The CMA's findings suggest that Google has been manipulating advertiser bids to give its own ad exchange, AdX, an unfair advantage in auctions. This practice, the CMA believes, has been ongoing since at least 2015, and it could be harming the digital content industry, which relies heavily on online advertising for revenue.

Google's Response and Potential Penalties

However, Google has disagreed with the CMA's view. Dan Taylor, Google's VP of Global Ads, stated, Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. He further added that Google remains committed to creating value for its publisher and advertiser partners in this highly competitive sector, and argued that the core of the case rests on flawed interpretations of the ad tech sector.

The CMA's action is significant as it signals a major challenge to Google's dominance in the advertising technology sector. This could potentially affect the company's revenue model and how online advertising operates in the UK. The CMA's findings are not final, and the regulator will now consider representations from Google before it reaches a decision on what action to take.

If the CMA's findings are confirmed, Google could face a fine of up to 10% of its global turnover, depending on the seriousness of the infringement. The regulator can also issue legally binding directions to bring the infringement to an end.

Global Scrutiny and Historical Precedents

This is not the first time Google has faced scrutiny over its ad tech practices. The US Department of Justice and the European Commission are also investigating Google's activities in ad tech. In June 2023, EU regulators said Google may have to sell part of its adtech business to address its concerns. Google said in December that such a step would be disproportionate.

The CMA's investigation is part of a broader global scrutiny of Google's market power in the ad tech sector. The process of considering comments on the CMA's statement of objections will last from December 2024 through March 2025. The CMA will then consider these comments from April 2025 through December 2025, suggesting a decision is expected sometime after December 2025.

This case is one of those typical antitrust cases filed in the past. For instance, in the late 1990s and early 2000s, Microsoft faced antitrust lawsuits in the US and Europe over its dominant position in the PC operating systems market. The outcomes of these cases led to significant changes in how Microsoft conducted its business and had far-reaching implications for the tech industry. The Google case could potentially have a similar impact on the digital advertising sector.