Canada’s Competition Bureau targets Google for anti-competitive practices

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Google faces anti-trust fights on both sides of border as Canadian agency looks to force sale of adtech tools.

Canada’s Competition Bureau is suing Google for what it calls anti-competitive conduct in Canada’s online advertising technology services. 

In a statement, the Bureau said it found Google had unlawfully tied its adtech tools together to maintain its market dominance and leveraged its position across these adtech tools to “distort auction dynamics.” The Bureau says Google owns four of the largest online advertising technology services used in Canada: DoubleClick for Publishers, AdX, Display & Video 360, and Google Ads.

“The Bureau’s position is that Google’s near-total control of the ad tech stack is by design,” the statement reads. “Through a series of related and interdependent actions, Google has, in our view, unlawfully tied together its various ad tech products, impeded rivals’ ability to compete and restrained innovative technologies that could threaten their market power.”

The Bureau alleges that Google gave its own tools preferential access to ad inventory, took negative margins in certain circumstances to disadvantage rivals, and dictated the terms on which its own publisher customers could transact with rival adtech tools.

The Bureau said this conduct allowed Google to entrench its dominance, prevent rivals from competing, inhibit innovation, inflate advertising costs, and reduce publishers’ revenues. According to the Bureau, Google holds an estimated market share of 90 percent in publisher ad servers, 70 percent in advertiser networks, 60 percent in demand-side platforms, and 50 percent in ad exchanges.

An illustration of Google’s advertising tech ecosystem. Image courtesy Competition Bureau Canada.

As part of the lawsuit, the Bureau is seeking an order that would require Google to cease anti-competitive practices and sell two of its adtech tools: its publisher ad server, DFP, and its ad exchange, AdX. The Bureau is also seeking an administrative monetary penalty “equal to three times the value of the benefit derived” from the alleged anti-competitive practices, or, alternatively, three percent of its worldwide gross revenues. 

“Google’s conduct has prevented rivals from being able to compete on the merits of what they have to offer, to the detriment of Canadian advertisers, publishers and consumers,” Competition Bureau Commissioner Matthew Boswell said in a statement. “We are taking our case to the [Competition] Tribunal to stop this conduct and its harmful effects in Canada.”

Under the Competition Tribunal’s rules, Google has approximately 45 days to file a response, and then the Bureau has 14 days to reply to that response.

RELATED: Does Canada have the leverage to regulate Big Tech?

In an email statement to BetaKit, Google vice president of global ads Dan Taylor said the company’s advertising technology tools help websites and apps fund their content, and enables businesses of all sizes to effectively reach new customers. 

“Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector,” Taylor said. “The CCB’s complaint ignores the intense competition where ad buyers and sellers have plenty of choice and we look forward to making our case in court.” 

Canada’s action adds to a chorus of international regulators targeting the internet giant with anti-trust lawsuits and anti-competitive allegations. Most notably, a United States federal judge ruled in favour of a Department of Justice (DOJ) case in August, dubbing Google a “monopolist” in the search and advertising markets. The DOJ has advocated in recent weeks for the forced sale of Chrome, Google’s pervasive browser, and to make ad performance data more transparent. Earlier this week, the DOJ and Google performed closing arguments for a second antitrust case pertaining to Google’s adtech markets, which closely mirrors the focus of Canada’s Competition Bureau. 

“While the full implications of this case are yet to unfold, it signals that Canada is actively utilizing its legal frameworks to address potential challenges that dominant foreign technology companies pose,” Council of Canadian Innovators president Ben Bergen noted on LinkedIn. “What might seem like a proactive stance highlights Canada’s renewed focus on enforcing competition laws, crucial for fostering a fair and competitive marketplace.”

On a recent episode of The BetaKit Podcast last month, Rory Capern, the former head of partnerships at Google Canada, said Canada didn’t have the leverage to regulate Big Tech in the same way as the United States. It appears as though Canada’s Competition Bureau is about to test that theory.

Feature image courtesy Pawel Czerwinski via Unsplash.



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