Google has been accused by the competition watchdog of abusing its dominance over the online advertising market to overcharge online publishers.
The Competition and Markets Authority (CMA) issued the search giant with a statement of objections on Friday after an investigation found that it may be acting illegally.
It comes days before the company faces a US trial over similar claims next week.
The CMA case, which follows similar action in the US and EU, is the latest challenge to Google’s grip over online advertising.
The regulator said Google’s control over multiple stages of the online advertising “stack” – the split-second auction system by which adverts are placed on web pages – allowed it to charge publishers higher fees and demote rival advertising services.
Google has a majority market share over the advertising servers that sell space, as well as the online exchanges where adverts are bought and sold. Advertisers spend billions of pounds annually on display adverts.
Juliette Enser, the CMA’s interim executive director of enforcement, said: “Many businesses are able to keep their digital content free or cheaper by using online advertising to generate revenue. Adverts on these websites and apps reach millions of people across the UK – assisting the buying and selling of goods and services.
“That’s why it’s so important that publishers and advertisers – who enable this free content – can benefit from effective competition and get a fair deal when buying or selling digital advertising space.”
CMA urged to take quick action
The News Media Association, which represents British news organisations including The Telegraph, urged the CMA to take quick action against the company under new competition laws that create a specialist digital markets unit within the watchdog.
Owen Meredith, chief executive of the News Media Association, said: “In order to tackle these damaging impacts on our creative sectors, we need the new digital markets regulator to start its work investigating the large tech platforms as quickly as possible, with Google Search and Google ad tech as top priorities for designation.
“By levelling the playing field, we can create a digital economy for the UK which fosters genuine competition, powering growth in these critical markets.”
Google hit out at the charges. Dan Taylor, its vice president of global ads, said: “The core of this case rests on flawed interpretations of the ad tech sector. We disagree with the CMA’s view and we will respond accordingly.”
The CMA can fine Google or order it to cease anti-competitive conduct. The European Commission has said Google might have to be broken up to address the issue.
Google will seek to defend its position in a US courtroom on Monday against anti-monopoly charges brought by the Department of Justice. It comes after the company lost a separate competition case over its dominance of the search engine market last month.