Britain’s competition watchdog launched its second investigation into Google’s advertising practices on Thursday, alleging that the Alphabet-owned (GOOGL.O) search giant may have distorted competition and illegally favored its own services.
The Competition and Markets Authority’s (CMA) latest investigation follows it’s earlier the year investigation into Google and Facebook owner-(FB.O) Meta’s “Jedi Blue” agreement.
Governments around the world are tightening regulations on US tech behemoths that have grown even more powerful as a result of the COVID-19 pandemic. There are numerous investigations into their market positions around the world, including in the United States and the European Union.
Last year, the United Kingdom imposed a new competition regime to prevent Google and Facebook from using their dominance to drive out smaller firms and disadvantaged customers.
The move established a dedicated Digital Markets Unit within the CMA, which could be given authority to suspend, block, and reverse technology firms’ decisions, as well as impose financial penalties for noncompliance.
Companies were advised to be more transparent about how they used consumer data, and that advertising procedures should adapt to the changing preconceptions about how data is available and used.
The CMA announced on Thursday that it was investigating three key components of the ad tech stack chain, namely services that mediate ad tech because Google was the largest provider in each of those components.
“We’re worried that Google may be using its position in ad tech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers,” said CMA Chief Executive Andrea Coscelli in a remark.
A Google spokesperson told Reuters that the business would continue working with the CMA to answer its questions and share information about how its systems operate.
Previously known as Google Ads, Google AdWords is a Google-developed online advertising platform in which advertisers bid to display brief advertisements, service offerings, product listings, or videos to web users. It can place ads in search engine results like Google Search (the Google Search Network) as well as non-search websites, mobile apps, and videos. Services are priced using a pay-per-click (PPC) model.
Alphabet Inc’s main source of revenue is Google Ads, which will contribute US$168.6 billion in 2020.
Google Ads have generated $257.6 billion in revenue by 2021.