Google Accused of Using Uncompetitive Practices

Tech giant Google is being accused of abusing its dominant market position to get rid of growing competition. In a statement of objections, the Competition and Markets Authority said Google is harming competition in the country "by using its dominance in online display advertising to favor its own ad tech services."

The watchdog contends that, since 2015, Google has taken advantage of its dominant position in the sector as the operator of the Google Ads and DV260 ad-buying tools and DoubleClick For Publishers, a publisher ad server, to bolster its AdX advertising exchange. The CMA said that AdX is at the heart of the company's ad tech stack and it's the platform on which it charges the highest fees to advertisers — approximately 20 percent of each bid for ad space that's processed there.

The CMA provisionally found that "the vast majority of publishers and advertisers use Google’s ad tech services in order to bid for and sell advertising space" on websites. By preferencing its own services, "Google disadvantages competitors and prevents them competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business," the CMA stated.

The statement of objections gives Google a chance to provide feedback and the CMA will consider those representations before it makes any final decision. A case decision group comprising three people (none of whom were involved in the preliminary investigation or sending the statement of objections). If the CMA ultimately determines that Google has infringed competition rules, it can fine the company up to 10 percent of its global annual revenue and order legally binding changes to the ad tech business.

Google disagrees with the decision and "will respond accordingly," Dan Taylor, vice president of Google Ads, said. "Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers," Taylor told CNBC in a statement. "Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector. The core of this case rests on flawed interpretations of the ad tech sector."

Regulators elsewhere have taken aim at Google's position in the ad tech space. The European Commission accused the company of "abusive practices" in the online ad space in June last year. The EC said that a potential order for Google to implement remedies may not be enough to resolve those practices. That could lead to the EU breaking up Google's ad business.

Meanwhile, the Department of Justice and Google are set to go head-to-head in a trial that will start on Monday. The agency has called for the company's ad tech business to be broken up, citing an alleged illegal monopoly Google holds in that market. Google failed in an attempt to have the case dismissed.

Last month, a federal judge ruled that Google illegally abused a monopoly over the search industry following a trial that stemmed from a separate DOJ lawsuit.