Google's advertising business has been "targeted" again, the UK accuses it of abusing its dominant position
The UK antitrust watchdog warns that Google's abuse of its dominant position in the advertising field could lead to hefty fines and impact its advertising business. The CMA pointed out that Google prioritizes its own services using its advantage, harming the interests of other publishers and advertisers. Google has opposed this and accused the CMA of misunderstanding the investigation findings. Currently, Google's online advertising business is its largest source of revenue, with revenue reaching $225 billion in 2022, accounting for about 80% of its total revenue
According to the financial news app Zhitong Finance, the Competition and Markets Authority (CMA) in the UK has warned that Alphabet (GOOGL.US)'s Google is abusing its dominant position in the advertising technology field. This could lead to Google facing hefty fines and being ordered to change one of its most profitable businesses.
The agency stated in a counter statement on Friday that Google, by leveraging its dominant position in the technology advertising field, prioritizes its own services, potentially harming the interests of thousands of UK publishers and advertisers.
Juliette Enser, interim executive director of CMA, stated: "Publishers and advertisers providing free content can benefit from effective competition, ensuring fair trading when buying or selling digital advertising space is crucial."
Online advertising is Google's most profitable business, generating around $225 billion in revenue in 2022, accounting for about 80% of its total revenue. Google has long been in a key position in collecting user data, enabling advertisers to target ads effectively. The company also sells ad space and provides technology for advertisers to find publishers to sell ad space. Google uses its algorithms to automatically calculate and provide ad space and prices to advertisers and publishers when users click on web pages.
Google has pushed back against CMA's investigation results, stating that it is based on a "misinterpretation of the advertising technology industry." Dan Taylor, Google's Vice President of Global Advertising, stated that Google disagrees with the investigation results and will respond accordingly.
European regulatory authorities have also criticized Google's dominant position in the technology advertising field. Last year, the Commission filed antitrust charges against Google, alleging that its ad exchange program favored its own projects over competitors and that the company was strengthening its core position in the advertising technology supply chain.
Crucially, in a July 2023 order, the European Commission stated that potential orders requiring Google to implement remedial measures may not be sufficient to correct abusive behavior, potentially paving the way for demands to separate its advertising technology business from its core services.
Additionally, the US Department of Justice will face Google in a trial in September, seeking to split up the search giant's advertising technology business on grounds of alleged illegal monopoly. The Department of Justice claims that Google's dominant position in the advertising technology field allows it to earn at least $0.3 for every dollar spent by advertisers through its online advertising tools.
If CMA finds any misconduct, it has the authority to impose fines on the company equivalent to 10% of its global revenue. CMA stated that before making a final decision, it will consider any feedback from Google and an independent group outside the initial investigating team will make the decision