British Competition Regulator Says Google's Ad Practices Harmed Competition

An anonymous reader shared this report from CNBC: Britain's competition watchdog on Friday issued a statement of objections over Google's ad tech practices, which the regulator provisionally found are impacting competition in the U.K. In a statement, the Competition and Markets Authority alleged that the U.S. internet search titan "has harmed competition by using its dominance in online display advertising to favour its own ad tech services." The "vast majority" of the U.K.'s thousands of publishers and advertisers use Google's technology in order to bid for and sell space to display ads in a market where players were spending £1.8 billion annually as of a 2019 study, according to the CMA.

The regulator added that it is also "concerned that Google is actively using its dominance in this sector to preference its own services." So-called "self-preferencing" of services by technology giants is a key concern for regulators scrutinizing these companies. The CMA further noted that Google disadvantages ad technology competitors, preventing them from competing on a "level playing field...." In the CMA's decision Friday, the watchdog said that, since 2015, Google has abused its dominant position as the operator of both ad buying tools "Google Ads" and "DV360," and of a publisher ad server known as "DoubleClick For Publishers," in order to strengthen the market position of its advertising exchange, AdX...

AdX, on which Google charges its highest fees to advertisers, is the "centre of the ad tech stack" for the company, the CMA said, with Google taking roughly 20% of the amount for each bid that's processed on its platform.

20% take

[phantomfive]

A 20% profit margin for a mature technology suggests some kind of scarcity, possibly artificial.

Re:

[Retired Chemist]

Is that 20% profit? That is gross not net. Without knowing what these services cost Google to provide, it is not possible to say what their profit is. I doubt if there costs are high enough to really justify the charge, but it is impossible to know given the data provided. I am not sure how to prevent Google from having a monopoly anyway. They own the search market, which means they own the eyeballs on the internet.

Re:

[phantomfive]

True, it is gross. We can look at the public financial statements to get an idea of how much profit they are making.

I am not sure how to prevent Google from having a monopoly anyway

They could have (for example) prevented the double-click merger. It's generally not a problem for Google to have a monopoly, it's a problem for them to abuse their monopoly.

Needing to buy an add for your own company name

[will4]

The fundamental complaint is that local businesses have to buy advertising for their own name just to appear at the top of search results.

For example, searching for "Kings Pancake House on Market and Washington Avenue" for your city may bring up a different breakfast restaurant advertisement before the top search result of "Kings Pancake House"..

Why should local businesses have to advertise to get their name at the top of such a narrow search?

Re:

[phantomfive]

Oh yeah, and especially lately, there are a lot of ads at the top of Google's search results.

You know what bothers me about this?

[Rosco P. Coltrane]

Google has been found to be a monopoly in the advertising space. And naturally, they're in a position to monopolize the advertising space because they're also a monopoly in the corporate surveillance space - meaning their ability to provide precise targeted ad placements is bolstered by their ability to violate everybody's private life and private data more often and better than their Big Data competitors

But here's the problem: there are two possible remediation solutions:

- The government kills the ability of Google and all their competitors to put everybody under surveillance, leveling the playing field by rolling back the state of the advertisement industry to pre-surveillance era.

- The government helps Google's competition acquire Google-level surveillance abilities, leveling the playing field by normalizing and entrenching the surveillance capitalism.

In other words, while it's great that Google was found to be a monopoly, it's also a very dangerous time for all of us because it might officially make surveillance an acceptable business practice.

Sadly, I have a feeling the government will not choose the right to privacy when choosing what to do about Google's monopoly :(

Re:

[Growlley]

why would the government puts it's NSA's panopticon out of business?

Re:

[Vanyle]

There are a lot more people than google that have crazy level of surveillance. There is a marketing firm called zoominfo that can get you the contact info of the people that visit your website without cookies, etc. It is scary good and it doesn't just say the company, they tell you who visited and can get you the contact info for everyone in the business they are at.

Google favors own ads .. who knew!

[Mirnotoriety]

Google favors own ads .. who knew!
--

Man gets six months in prison for chanting ‘Who the f**k is Allah’ [jihadwatch.org]

No shit, Sherlock!

[thesjaakspoiler]

Did that have to take +20 years to figure that out?

Re:

[jonbryce]

20 years ago, Yellow Pages had a near-monopoly on local advertising, and Google were just beginning to challenge it.
I'm describing the UK position here, and this is the UK's Competition and Market's Authority. The situation in your country may have been different, but that isn't something the UK government is concerned about.