Google uses anti-competitive practices to dominate the market for online advertising technology, a UK watchdog has provisionally found.
The potentially unlawful behaviour could be harming thousands of UK publishers and advertisers, an investigation by the Competition and Markets Authority (CMA) has warned.
It accuses Google of preventing rivals from “competing on a level playing field” with its own tech for the billions of pounds spent by UK businesses on online advertising.
Google said the watchdog’s findings were “flawed” and said it would respond.
According to the CMA, the vast majority of businesses use Google’s services when placing digital ads on websites.
Google maintains it has a strong business incentive to help UK firms thrive, and argues that advertisers choose to use Google because its products work well and help their businesses grow.
The watchdog will now consider representations from Google before deciding what action to take.
If Google is found to have broken competition law, the watchdog could impose a financial penalty of up to 10% of annual worldwide group turnover and issue legally binding directions to the firm.
“We’ve provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites,” Juliette Enser, the CMA’s interim executive director of enforcement, said in a statement.
She pointed out that many businesses were able to keep their digital content free by using revenue from digital adverts, which reach millions of people across the UK.
“That’s why it’s so important that publishers and advertisers – who enable this free content – can benefit from effective competition and get a fair deal when buying or selling digital advertising space,” she wrote.
But Google’s vice president of global ads, Dan Taylor argued the search giant’s advertising technology helped websites and apps fund their content, and effectively reach new customers.
“The core of this case rests on flawed interpretations of the ad tech sector. We disagree with the CMA’s view and we will respond accordingly,” he wrote.
Google’s activities in ad tech are also subject to continuing probes by the US Department of Justice and the European Commission.
Competition economist Dr Cristina Caffarra, told the BBC that while the CMA’s statement of objections certainly presented “another headache” for Google, the regulator was merely “joining the club” of those who have already taken action.
“The UK is by no means some sort of pathfinder here,” she said.
The Department of Justice, state of Texas – which along with nine other states sued Google over alleged abuse of its ad tech dominance in 2020 – and the EU are all far ahead, Dr Caffarra added.
In 2023, EU competition regulators told Google it might need to sell part of its ad-tech business to address their concerns.
But the tech-giant has argued this would be a “disproportionate” step.
Separately, Google is seeking to appeal a UK court decision in June to allow a £13.6bn collective-action lawsuit against it to proceed.
The case alleges the search giant behaved in an anti-competitive way which caused online publishers in the UK to lose money.
Google has vowed to oppose the claim “vigorously and on the facts”.
Additional reporting by Liv McMahon
