Canada's Competition Bureau filed a lawsuit on Thursday against Google, alleging anti-competitive practices in the tech giant's online advertising business.
The Bureau is demanding that Google divest two of its key advertising technology tools—DoubleClick for Publishers (DFP) and AdX—and pay a penalty to comply with the country's Competition Act.
The lawsuit, filed with the Competition Tribunal, follows a multi-year investigation into Google's dominance in the digital advertising market. According to the Bureau, Google holds a 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 in Canada.
This dominance, the Bureau claims, has discouraged competition, stifled innovation, inflated advertising costs, and reduced revenue for publishers.
The Bureau's investigation concluded that Google has used its control of the ad tech stack—a suite of tools enabling publishers and advertisers to buy and sell digital ad inventory through automated auctions—to unlawfully maintain and entrench its market power. Key allegations include:
- Tying Products Together: Google allegedly linked its ad tech tools, compelling advertisers and publishers to use its entire ecosystem. For instance, advertisers could only access real-time bids from Google's ad exchange if they also used Google's publisher ad server.
- Distorting Auction Dynamics: Google is accused of giving its own tools preferential access to ad inventory, taking financial losses in certain cases to disadvantage competitors, and setting restrictive terms for publishers using rival platforms.
Newsweek reached out to Google via email for comment.
"Google has abused its dominant position in online advertising in Canada by engaging in conduct that locks market participants into using its own ad tech tools, excluding competitors, and distorting the competitive process," said Matthew Boswell, Canada's commissioner of Competition, in a statement.
The Competition Bureau is seeking a penalty equal to three times the financial benefit Google derived from its alleged anti-competitive practices—or 3 percent of Google's worldwide gross revenues if the exact amount is indeterminable. The Bureau also wants an order prohibiting Google from continuing these practices in Canada.
This case marks one of several international challenges to Google's dominance in digital advertising. In the U.S., the Department of Justice recently concluded closing arguments in a similar antitrust case. Google has also faced investigations and lawsuits in the European Union, where it offered to sell its ad exchange to end an antitrust probe earlier this year.
The Competition Tribunal, an independent judicial body, will determine the outcome of the case. Under its guidelines, Google has 45 days to file a response.
Digital advertising uses ad tech tools to match advertisers with publishers offering ad space. Google owns several of the largest tools in this ecosystem, including DFP, AdX, Display & Video 360, and Google Ads. In 2022, more than 200 billion Canadian ad transactions flowed through Google's ad tech stack.
The Bureau argues that Google's dominance is not a result of superior products but rather strategic actions designed to eliminate competition. These actions, the Bureau asserts, have insulated Google from competitive pressure and harmed the Canadian digital economy.
The case will now proceed to the Competition Tribunal, which will decide whether Google must comply with the Bureau's demands. The outcome could set a precedent for regulating tech giants in Canada and beyond.
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