Canada’s antitrust watchdog announced on Thursday (November 28) that it has filed a lawsuit against Google for suspected anti-competitive behavior in its online advertising practices.
The Competition Bureau of Canada requested Google to divest two advertising technology tools and pay fines, citing that it was necessary as its investigation uncovered that the company was “illegally” bundling its technology tools together to maintain dominance in the market.
The matter has now been referred to the Competition Tribunal, which is responsible for adjudicating cases related to violations of the Competition Act.
The Competition Bureau has petitioned the Competition Tribunal to order Google to sell its publisher ad server DoubleClick for Publishers and ad exchange service AdX.
According to the Bureau’s estimates, Google holds a 90% market share in publisher ad servers, a 70% share in advertiser networks, a 60% share in demand-side platforms, and a 50% share in advertisement exchanges.
The Canadian government believes that Google’s dominant position hinders competitors from participating in the market, stifles innovation, and raises advertising costs.
Competition Bureau Director Matthew Boswell stated in a release, “Google has abused its dominant position in the Canadian online advertising sector by engaging in conduct that locks in market participants to using its own ad technology tools, excluding competitors, and distorting the competitive process.”
The amendments to Canada’s Competition Act, which came into effect on December 15, 2023, aim to modernize the Canadian competition regime, enhance the enforcement capabilities of the Competition Bureau, and prohibit any agreements that have the effect of “impeding, restricting, or diminishing competition.” The revised provisions cover areas such as market studies, concentration reviews of operators, inter-company cooperation, and abuse of market dominance.
Prior to the amendments to the Competition Act, the three elements for identifying abusive market dominance were: market dominance, the purpose of restricting competition, and the effects of restricting competition. The amendments have simplified the criteria for determination, allowing the Competition Tribunal to issue prohibitory orders when it finds that companies with market dominance engage in conduct that limits competition or its effects. When all the criteria are met, more stringent remedies, such as administrative fines, can be imposed.
(This article references a report from “The Hill Times”)