Competition Bureau sues Google alleging anti-competitiveness on web ads

The Competition Bureau is suing Google implicit alleged anticompetitive behaviour successful the tech giant’s online advertizing concern and wants the institution to merchantability disconnected 2 of its services and wage a penalty.

The watchdog said Thursday that specified enactment is indispensable due to the fact that an probe it conducted into Google has recovered the institution “unlawfully” tied unneurotic its advertisement tech tools to support its marketplace dominance.

That dominance has discouraged contention from rivals, inhibited innovation, inflated advertizing costs and reduced steadfast revenues, the bureau said.

The Thursday announcement ratchets up its probe into Google and the satellite of online advertising, which mostly amounts to ads shown to radical erstwhile they sojourn websites.

Website owners connection the advertisement abstraction arsenic a mode to thrust revenue, and the ads are typically bought and sold done automated auctions utilizing blase platforms.

Throughout the bargain and merchantability process companies usage a slew of tools that assistance negociate advertisement inventory, facilitate purchases oregon enactment arsenic an intermediary betwixt buyers and sellers.

These tools are collectively known arsenic the advertisement tech stack, which the bureau alleges Google has “near-total power of” due to the fact that it owns 4 of the largest online advertizing exertion services utilized successful Canada: DoubleClick for Publishers, AdX, Display & Video 360 and Google Ads.

“No different azygous advertisement tech supplier has Google’s standard oregon scope crossed the advertisement tech stack, with implicit 200 cardinal Canadian web advertisement transactions flowing done Google’s advertisement tech tools successful 2022,” the bureau said.

It estimates Google has a marketplace stock of 90 per cent successful steadfast advertisement servers, 70 per cent successful advertiser networks, 60 per cent successful demand-side platforms and 50 per cent successful advertisement exchanges.

However, Dan Taylor, Google’s vice-president of planetary ads, maintains it is simply a “highly competitory sector.”

He said successful a connection that the bureau’s ailment “ignores the aggravated contention wherever advertisement buyers and sellers person plentifulness of choice.”

Taylor added Google looked guardant to defending itself against the bureau.

The substance is headed for the Competition Tribunal, a quasi-judicial assemblage that hears cases brought guardant by the contention commissioner astir non-compliance with the Competition Act.

The bureau is asking the tribunal to bid Google to merchantability its steadfast advertisement server, DoubleClick for Publishers, and its advertisement exchange, AdX.

It has besides demanded the institution wage a monetary punishment adjacent to 3 times the worth of the payment it derived from anticompetitive practices oregon “if that magnitude cannot beryllium reasonably determined,” 3 per cent of Google’s worldwide gross revenues.

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The bureau said making these moves volition assistance code however “Google positioned itself astatine the centre of the advertisement tech ecosystem and utilized its power crossed the advertisement tech stack to unlawfully leverage its marketplace powerfulness with 1 merchandise to fortify its presumption with its others.”

The watchdog said respective moves person convinced it Google’s dominance is “by design.”

The archetypal is that the bureau alleges Google made its advertiser advertisement web lone disposable to its ain advertisement exchange, and successful turn, compelled publishers to usage its steadfast advertisement server to entree real-time bids from its advertisement exchange.

The bureau says the 2nd is that Google worked to “distort auction dynamics” by giving its ain advertisement speech preferential entree to advertisement inventory, taking antagonistic margins successful definite circumstances to disadvantage rivals, and dictating the presumption connected which its ain publisher-customers could transact with rival advertisement tech tools.

The bureau’s allegations were developed during a multi-year probe that dates backmost to astatine slightest 2021, erstwhile it successfully sought a tribunal bid requiring it to supply documents related to its online advertizing business. It achieved a second, akin bid earlier this year.

Under the Competition Tribunal’s guidelines, respondents to applications similar the 1 the bureau filed against Google typically person 45 days to record a response. The bureau past has 14 days to reply.