Google occupies a unique and powerful position in the digital advertising ecosystem. It collects vast amounts of data on users through its search engine, enabling advertisers to target ads effectively. However, its reach doesn’t stop there. Google also sells ad space and provides the technology that allows advertisers to connect with publishers who sell ad space. With algorithms and automated systems, Google can offer ad space, set prices, and match advertisers with publishers as users click on web pages.
In 2022, Alphabet Inc. earned approximately US$225 billion from online advertising, which accounted for about 80% of its total revenue. This demonstrates the sheer scale of its dominance in the ad tech industry, where it holds sway over the pricing and distribution of online ads.
However, the CMA’s concerns go beyond in connecting advertisers with publishers. According to the agency, Google is prioritizing its services over those of its competitors, which could potentially harm thousands of UK publishers and advertisers. In doing so, Google could be restricting competition and unfairly benefiting from its dominant market position. This has raised alarm bells among regulators, who argue that Google’s search monopoly and ad tech practices may be illegal under UK competition laws.