(FreedomBeacon.com)- The Competition and Markets Authority in the United Kingdom has opened an inquiry to determine whether or not Google has violated the law by obstructing competition in the market for advertising technologies.
They will investigate the company to see whether or not it unfairly distorted competition and made it more challenging for other advertising firms to compete.
The regulatory agency said that at the root of its inquiry into the search giant owned by Alphabet would be advertising technology intermediation, which is often referred to as the “ad tech stack.”
According to the statistics for 2019, this category of services, which helps to arrange the sale of online advertising space between sellers and purchasers, brings in an estimated annual revenue of £1.8 billion.
According to the CMA, Google has a strong position at various sector levels. The company provides a wide range of services, including platforms where advertisers can buy online advertising space, technology that automates the sale of advertising space, and services for managing ad inventories for publishers who decide which advertisements to show.
Because it provides such a wide range of services, Google, located in California, interacts with both purchasers and sellers of advertisements and collects fees from both groups.
The Competition and Markets Authority (CMA) stated that it wanted to investigate whether or not Google was unfairly influencing competition in the industry by restricting the interoperability of some services and contractually tying together some of its services, thereby making it more difficult for other companies to compete.
Andrea Coscelli, the chief executive of the CMA, said that they are worried that Google may be using its position in ad tech to favor its services to the detriment of its rivals, its customers, and ultimately consumers. They are worried about Google’s “dominant market share.”
Weakening competition in this area could reduce publishers’ ad revenues, who may be forced to compromise the quality of their content to cut costs or put their content behind paywalls.
It may also raise costs for advertisers, which are passed on through higher prices for advertised goods and services.
Coscelli said that It’s vital that we continue to scrutinize the behavior of the tech firms which loom large over our lives and ensure the best outcomes for people and businesses throughout the UK.
In response, a Google spokesman said that advertising tools from Google and many competitors help websites and apps fund their content and help businesses of all sizes effectively reach their customers.
Google said that Google’s tools alone have supported an estimated £55billion in economic activity for over 700,000 businesses in the UK. When publishers use our advertising services, they keep most of the revenue.
‘We will continue to work with the CMA to answer their questions and share the details on how our systems work.’