Canadian anti-trust watchdog, the Competition Bureau, has filed a challenge Google over it’s adtech practices.
Is Google operating a monopoly over it’s advertising services? There’s, honestly, a case to be made there. After all, there are very few services outside of Google where one can take out advertising for a website in the first place. Sure, there might be companies that say they offer alternatives, but most of the time, they rely on Google’s Adsense service for their delivery, making them basically a reseller for online advertising rather than a legitimate competitor.
This is far from the only time Google has been hit with anti-trust issues. Back in September, the US Department of Justice (DOJ) filed a lawsuit against Google, challenging them over their alleged anti-competitive practices in the adtech space. Google has been hit with numerous lawsuits over other elements of its business practices such as search.
In Canada, a challenge over Google’s Adtech on anti-trust grounds has been filed by the Competition Bureau. Here’s their press release:
The Competition Bureau is taking legal action against Google for anti-competitive conduct in online advertising technology services in Canada. Following a thorough investigation, the Bureau has filed an application with the Competition Tribunal that seeks to remedy the conduct for the benefit of Canadians.
This case is about online web advertising, which consists of ads shown to users when they visit websites. Many publishers count on digital ad revenue to support their activities and reach. Digital ad inventory is often purchased and sold through automated auctions using sophisticated platforms. These individual platforms are known as ad tech tools while the entire suite of tools used throughout the buy and sell process are collectively known as the ad tech stack.
The Bureau’s investigation found that, in Canada, Google is the largest provider across the ad tech stack for web advertising and has abused its dominant position through conduct intended to ensure that it would maintain and entrench its market power. Google’s conduct locks market participants into using its own ad tech tools, prevents rivals from being able to compete on the merits of their offering, and otherwise distorts the competitive process.
In particular, the Bureau found that Google has:
- unlawfully tied its various ad tech tools together to maintain its market dominance; and
- leveraged its position across these ad tech tools to distort auction dynamics by:
- giving its own tools preferential access to ad inventory,
- taking negative margins in certain circumstances to disadvantage rivals, and
- dictating the terms on which its own publisher customers could transact with rival ad tech tools.
The Bureau’s position is that by implementing this anticompetitive conduct, Google has been able to entrench its dominance, prevent rivals from competing, inhibit innovation, inflate advertising costs and reduce publishers’ revenues.
The Bureau’s application with the Competition Tribunal seeks an order that, among other things:
- requires Google to sell two of its ad tech tools;
- directs Google to pay a penalty to promote compliance with the Competition Act; and
- prohibits Google from continuing to engage in anticompetitive practices.
The final decision in this matter rests with the Competition Tribunal.
While the Competition Bureau likely has a case, any challenge over the dominance of a particular player generally faces an uphill battle. The reason for it is that Canada largely has anti-trust laws in name only. A great example of that revolves around the Rogers Shaw mega-merger. Briefly, Canada had 4 major internet, TV, and cell phone providers. Rogers then announced that they would be buying up one of the only other 3 competitors to increase the monopolistic nature of the industry. The Competition Bureau challenged the rubberstamping of that decision by pointing out the obvious anti-competitive nature of the takeover.
The court, in turn, shot down that challenge, arguing that pointing out the Rogers monopolistic market dominance would give the monopolists the sads – and if there’s one thing you can’t do in this country, it’s giving Canada’s corporate overlords the sads. The challenge went without appeal and now Canada has only three major providers left who are freely ripping off consumers with reckless abandon.
There is the added complexity that Google is technically a foreign corporation, however, so it’s not as though it’s a slam dunk for the monopolist this time around per se. Still, this is following the Rogers Shaw situational clusterfuck, so it’s hard to look at this and say, “We got ’em for sure this time!”
Still, that’s not to say I don’t support the idea. I know that I’ve probably been hit with the notorious Project Bernanke since the beginning of this sites existence. This is basically where I would normally have enough revenue directly from the site to start investing in expanding Freezenet, but thanks to Project Bernanke, I’m left with mere pennies at most for the same amount of traffic that would normally give a website (like mine) the opportunity to grow as a small business. So, I wholeheartedly support the idea of anything that would shake up the market and give small businesses like mine the chance to succeed.
The problem is that I look back at the recent history on this and wonder what the chances are that this challenge would ever really succeed. Like the press release says, the ball is now in the Competition Tribunal at this point.
(via @Mgeist on Bluesky)
