The UK’s antitrust watchdog has launched a fresh inquiry into Alphabet Inc.’s Google, based on allegations that it may have misused its dominating position in ad tech, which is crucial to the internet giant’s economic model. The decision by the Competition and Markets Authority creates a new front in the Competition and Markets Authority’s regulatory battle with Google. The CMA expressed worry that Google was attempting to improperly favor its own ad exchange services while excluding rivals’ offerings.” Weakening competition in this sector might diminish ad revenues for publishers, who may be obliged to degrade the quality of their material to save money or put their content behind paywalls,” said Andrea Coscelli, Chief Executive Officer of the CMA.
The workings of Google’s ad ecosystem
Global watchdogs have begun to focus on the massive leverage that companies like Google and Meta’s Facebook possess over ad marketplaces, hitting at the core of the internet titans’ money-making operations. A separate investigation by the CMA is underway into suspected collusion in the way Google handles its online display advertising services. Since at least 2020, the CMA has been looking at how Google buys and sells advertising, claiming that its advertising stack is a possible conflict of interest. It’s been suggested that powers be granted that would allow for structural modifications. Google stated in a statement that “advertising solutions from Google and many others help websites and applications support their content, and enable companies of all sizes to successfully reach their consumers.” “Publishers keep the majority of money when they use our advertising services.”
“We’re concerned that Google is abusing its ad tech position to favor its own services at the expense of competitors, users, and ultimately consumers,” Andrea Coscelli, the CMA’s Chief Executive, stated. “Weakening competition in this sector might diminish publishers’ ad earnings, forcing them to degrade the quality of their material or lock it behind paywalls to save money.” It may also be increasing advertising expenditures, which are then passed on to consumers in the form of increased pricing for marketed goods and services.”
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