The UK’s competition watchdog has released its provisional decision on Google’s ad tech behaviours, finding them to be using anti-competitive practices which it believes could be harming thousands of UK publishers and advertisers.

The Competition and Markets Authority is concerned that Google is abusing its market dominance in open display ad tech, pushing the vast majority of publishers and advertises to use the company’s ad tech services in order to bid for and sell advertising space.

“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’s statement read.

“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, interim executive director of enforcement, said.

“Many businesses are able to keep their digital content free or cheaper by using online advertising to generate revenue. Adverts on these websites and apps reach millions of people across the UK – assisting the buying and selling of goods and services.

“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.”

In its 2019 market study into digital advertising, the CMA found that advertisers were spending around £1.8 billion annually on open-display ads, marketing goods, and services via apps and websites to UK consumers.

The CMA’s new investigation, which opened in 2022, looked at Google’s role across the ad tech stack, which consists of various intermediaries that facilitate the sale of online open-display advertising space on websites or mobile apps between ‘sellers’ and ‘buyers’.

Google serves as an intermediary in three key parts of the ad tech stack chain, operating two ad buying tools, as well as a publisher ad server. In the centre of the ad tech stack, Google operates an ad exchange, which typically receives requests for bids from publishers and responding bids from advertisers, and then conduct an auction to match these two sides.

In this ad exchange, called AdX, Google charges its highest fees out of the tech stack, equal to approximately 20% of the bid amount.

The CMA investigation Google’s potential anti-competitive self-preferencing in the ad tech stack.

The watchdog found that since at least 2015, Google has abused its dominant positions through the operation of both its buying tools and publisher ad server in order to strengthen AdX’s market position, and to protect AdX from competition from other exchanges.

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Moreover, due to the highly integrated nature of Google’s ad tech business, the CMA has provisionally found that Google’s conduct has also prevented rival publisher ad servers from being able to compete effectively with DFP, harming competition in this market.

The CMA found that Google had provided AdX with preferential access to advertisers using Google Ads, manipulated advertiser bids to have higher values when submitted to AdX than when submitted to rival exchange auctions, and allowed AdX to bid first in auctions run by its publisher ad server.

Now, the CMA is considering what may be required by Google to ensure that these anti-practices are stopped, and that Google does not engage in similar practices in the future.