Canada’s competition watchdog is joining the ranks of regulators seeking to break up Google’s adtech business.
What happened: The Competition Bureau is suing Google to end what it calls anticompetitive practices in online advertising. That includes allegedly tying its adtech tools together, sometimes taking a loss to maintain its market dominance, and choosing terms on which customers can work with other providers.
- While the Bureau asked for the sale of two adtech tools, the tools in question — DoubleClick for Publishers (DCP) and AdX — were bundled together as Google Ad Manager in 2018.
- The Bureau also called for Google to pay a penalty worth either three times what it earned from anti-competitive practices, or 3% of its worldwide gross revenues.
Catch-up: The Bureau’s claims resemble those made by other regulators. The U.S. Department of Justice wrapped up its case against Google this week, and the EU found that the company favoured its own ad services last year.
- The DOJ has also suggested that Google should sell off Google Ad Manager. The EU warned Google of a potential breakup order, though it may reconsider.
Why it’s happening: Programmatic advertising — the automated targeting of online ads — can be complicated, but here’s the simple version: all of those little boxes on websites that ads appear in? Google owns most of them, as well as tech publishers use to sell ad space, advertisers use to buy and target ads, and ad exchanges that handle those transactions.
- Critics claim owning the most popular platforms on both the buy side (Display & Video 360) and sell side (DCP), as well the exchange between them (AdX), gives Google unfair control over the market.
Why it matters: For one, most of Google’s money comes from advertising: US$65.5 billion globally last year, $8.3 billion of which came from its ad network. But it also shows some regulators are feeling emboldened to follow in the footsteps of the U.S. and EU.
- For example, the Online New Act didn’t directly address the market conditions that allow Google and Meta to charge a big share of ad revenue from news outlets, instead charging tech companies to have news on their platforms.
- But that was seen at the time by some legal experts as a next-best option, since Canada wasn’t likely to break up Google’s ad business without help from other jurisdictions.
Bottom line: Regardless of the outcome of any antitrust cases, appeals by Google are likely to push any breakup that may happen years down the line.