The Competition Bureau is suing Google over alleged anticompetitive conduct in the tech giant’s online advertising business and wants the company to sell off two of its services and pay a penalty.
The watchdog said Thursday that such action is necessary because an investigation it conducted into Google has found the company “unlawfully” tied together its ad tech tools to maintain its market dominance.
That dominance has discouraged competition from rivals, inhibited innovation, inflated advertising costs and reduced publisher revenues, the bureau said.
The Thursday announcement ratchets up its investigation into Google and the world of online advertising, which largely amounts to ads shown to people when they visit websites.
Website owners offer the ad space as a way to drive revenue, and the ads are typically bought and sold through automated auctions using sophisticated platforms.
Throughout the buy and sell process companies use a slew of tools that help manage ad inventory, facilitate purchases or act as an intermediary between buyers and sellers.
These tools are collectively known as the ad tech stack, which the bureau alleges Google has “near-total control of” because it owns four of the largest online advertising technology services used in Canada: DoubleClick for Publishers, AdX, Display & Video 360 and Google Ads.
“No other single ad tech provider has Google’s scale or reach across the ad tech stack, with over 200 billion Canadian web ad transactions flowing through Google’s ad tech tools in 2022,” the bureau said.
It estimates Google has a market share of 90 per cent in publisher ad servers, 70 per cent in advertiser networks, 60 per cent in demand-side platforms and 50 per cent in ad exchanges.
However, Dan Taylor, Google’s vice-president of global ads, maintains it is a “highly competitive sector.”
He said in a statement that the bureau’s complaint “ignores the intense competition where ad buyers and sellers have plenty of choice.”
Taylor added Google looked forward to defending itself against the bureau.
The matter is headed for the Competition Tribunal, a quasi-judicial body that hears cases brought forward by the competition commissioner about non-compliance with the Competition Act.
The bureau is asking the tribunal to order Google to sell its publisher ad server, DoubleClick for Publishers, and its ad exchange, AdX.
It has also demanded the company pay a monetary penalty equal to three times the value of the benefit it derived from anticompetitive practices or “if that amount cannot be reasonably determined,” three per cent of Google’s worldwide gross revenues.