Published on 6 September, the CMA disclosed a series of ‘provisional objections’ regarding Google’s policies and practices favouring its ad-tech solutions. 

On 6 September, the CMA published a series of ‘provisional objections’ about Google’s policies and practices, which favour its ad-tech solutions.

Due for a further investigation, the CMA suspects that “Google may have broken competition law by using its dominance to favour its own ad tech services in open-display advertising.”

Of significance to UK advertising, “the provisional findings relate to how Google ‘self-preferences’ its own ad exchange – harming competition and, as a result, advertisers and publishers.”

The CMA investigations draw parallel concerns to ongoing inquiries conducted by the US Department of Justice and EU competition authorities on the dominance of Google’s ad tech solutions over rivals and its impact on competitive practices related to fair use, cost, and impeding alternative services.

As noted, “The CMA is concerned that Google is actively using its dominance in this sector to prefer its own services. Google disadvantages competitors and prevents them from competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business.”

The CMA’s investigation is exclusively focused on determining whether Google’s current ad-tech framework for publisher ad servers, ad buying tools, and ad exchanges is anti-competitive by favouring its own solutions of DoubleClick, Google Ads, and the AdX exchange.

CMA probes Google on abusive adtech practices stifling competition

Fair pricing is a concern, as the CMA notes that “AdX is where Google charges its highest fees in the ad tech stack, approximately 20% of the bid amount.”

The structure of Google’s ad-tech solution is provisionally determined as ‘self-preferencing’, as it allegedly provides AdX with preferential access to advertisers using Google Ads, allowing it to manipulate advertiser bids to appear higher in AdX’s auctions.
The CMA has provisionally determined that Google’s ad-tech solution ‘self-preferences’ by giving AdX preferential access to advertisers using Google Ads, allowing it to manipulate advertiser bids to appear higher in AdX’s auctions.

“The CMA has provisionally found that, since at least 2015, Google has abused its dominant position through the operation of both its buying tools and publisher ad server in order to strengthen AdX’s market position and to protect AdX from competition from other exchanges.”
The CMA has found that, since at least 2015, Google has abused its dominant position by operating both its buying tools and publisher ad server to strengthen AdX’s market position and protect it from competition.

The investigation will determine whether Google has engineered an abusive structure for ad-tech rivals, in which Google benefits from providing AdX with exclusive or preferential access to advertisers using Google Ads, manipulating bids to appear higher in AdX’s auctions compared to rival exchanges, and allowing AdX to bid first in auctions run by its own publisher ad server.

The investigation will assess whether Google has engineered an abusive ad-tech structure, benefiting AdX by giving it exclusive or preferential access to advertisers using Google Ads, manipulating bids to appear higher in AdX’s auctions, and allowing AdX to bid first in auctions run by its own publisher ad server.

As it stands, the CMA has provisionally found that this anti-competitive conduct is ongoing. The CMA is therefore considering what may be required to ensure that Google ceases the anti-competitive practices, and that Google does not engage in similar practices in the future.
The CMA has found that Google’s anti-competitive conduct is ongoing.

Google vs DOJ

This week, the DOJ will begin its hearings against Google, challenging the web giant’s advertising practices and levelling the group with accusations of monopolising the digital ad market to the detriment of competition, particularly harming news publishers.

The trial forms part of the Biden administration’s broader effort to curtail the power of ‘big tech’ dominance on advertising and marketing, hindering competition and innovation in wider markets.

The case follows an earlier ruling in August where a federal judge determined that Google’s dominance in online search violates US competition law, a decision Google immediately appealed.

Google denies the allegations – stating that it has never impeded alternative services from being used by advertisers. Its defence claims that individual preferences are granted to each advertiser regarding how they develop their marketing campaigns.

The tech giant notes that its advertising systems and tech tools are designed to align with secondary services, helping advertisers optimise and commercialise campaigns.

Google further questioned its position of ‘market dominance’, outlining that US critics had only accounted for its leadership in search and display advertising, and not other digital mediums such as social media, apps, online streaming, and video platforms.

Tech observers are closely monitoring developments as to “Who will come out on top?”. The DOJ has lined up testimonies from a range of expert witnesses, including current and former Google employees, executives from top publishers like News Corp and Gannett, and industry experts.

Google seeks definitive assessment

Google is reported to seek a definitive assessment of its advertising practices to avoid the costly restructuring of its ad-tech solutions for individual markets, a scenario the tech giant wants to avoid.

In 2021, France’s competition authority fined Google €220m for abusing antitrust laws, in which the company was ordered to adopt technical changes to allow more transparency and fair competition for third-party ad exchanges.

France’s decision was deemed significant as Google agreed to the ruling without contest, setting a precedent for similar global investigations.

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The competition regulator officially announced the launch of its merger inquiry by notice to those concerned in September, before inviting comments on the purchase by any interested party.

Those comments needed to be provided before the invitation closed on October 5, following which the CMA would proceed to the analysis stage of phase one before reaching a decision on whether to enter phase two or close the inquiry by today.

Documenting the process thus far, Evolution offered the following update: “The CMA has today, on November 16, 2020, announced its approval of Evolution’s acquisition of NetEnt. 

“Consequently, the condition regarding the receipt of all necessary competition approvals has been fulfilled. The other conditions for completion of the offer, which are included in the offer document that was published on August 20, 2020, remain unchanged and are still applicable. 

“The acceptance period for the offer expires on November 20, 2020. Assuming that the offer is declared unconditional no later than around November 23, 2020, settlement is expected to commence around December 1, 2020. Evolution reserves the right to extend the acceptance period for the Offer and to postpone the settlement date.”

The proposed transaction, an offer the NetEnt board recommended to shareholders, sees Evolution offer 0.1306 shares for each share in NetEnt, valuing each at SEK 79.93 and all shares in the firm to approximately SEK 19.6bn.

The offered consideration per share represents a premium of 43 per cent compared to the closing price of the NetEnt share of series B on Nasdaq Stockholm on June 23, 2020.

The company previously documented that the Malta Competition and Consumer Affairs Authority had rubber stamped its approval on September 29, 2020.

Evolution had initially expressed an expectation of closing the transaction on November 2, with an acceptance period commencing on August 17, 2020 and expiring on or around October 26, 2020.

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12

The European Gaming and Betting Association has again reiterated the need to introduce new rules to better protect the continent’s 12 million online gamblers.

This comes as the new EU term begins, with much policy attention already having been given to the importance of making Europe’s digital economy work better for consumers and businesses.

Coming in the aftermath of a new European Parliament study that was presented earlier this month, the EGBA has called on the EU to:

• Create a safer online gambling environment across member states.
• Promote better alignment of national gambling policies, which it believes could occur through MEPs encouraging the incoming Commission to reinstate the expert group of national gambling authorities.

The authority is striving to see the introduction of stronger and more uniform consumer protection rules and enhanced regulatory cooperation, which it states would be a “win-win-win”.

200,000

The Association of Gaming Equipment Manufacturers and Gaming Laboratories International have strengthened their charitable initiatives through a $200,000 donation to the Dr Robert Hunter International Problem Gambling Center.

Done through their joint Lasting Impact Philanthropic Initiative, first unveiled earlier this year, the first gift from which went to to the Howard R Hughes College of Engineering building fund at the University of Nevada with a $500,000 contribution.

The gift, committed over the next two years, has been made to highlight the importance of Responsible Gaming Education Week 2019, taking place this week.

Organised by the American Gaming Association, it marks a national push for responsible gaming education, training and awareness that includes participation from many industry stakeholders.

30

Caesars Entertainment is lauding the 30th anniversary of its responsible gaming efforts, which has seen the firm make a significant donation to a number of charitable organisations countrywide and further afield.

In recognition of establishing its first responsible gaming standards 30 years ago, with a program that has subsequently trained in excess of 4,000 individuals, Caesars is also pledging a further $1m donation.

The Las Vegas headquartered firm is to give the sum to the National Center for Responsible Gaming and other third-party institutions in the US and elsewhere, to help further advance and shape the future of responsible gaming.

Caesars has highlighted a number of landmark moments during its first 30 years of responsible gambling beginning with the implementation of ‘Project 21,’ an education program designed to deter underage gambling and service of alcoholic beverages to minors.

In 1995 Caesars, in collaboration with AT&T and the National Council on Problem Gambling, established the industry’s first national toll-free helpline for gamblers who might need assistance, as well as debuting a nationwide self-exclusion and self-restriction program in four years later.

120

The Competition and Markets Authority has cleared Inspired Entertainment’s $120m acquisition of the Gaming Technology Group (NTG) of Novomatic UK.

This comes after the non-ministerial government department announced it was investigating the proposed transaction in July, citing that it was to judge whether creating the enlarged organisation would result in a significant lessening of competition within the UK market.

Inspired announced that a definitive agreement was in place on June 11, with the CMA’s approval representing a critical requirement to complete the transaction.

Following this announcement, the company expects to complete the NTG acquisition around October 1, 2019, subject to the satisfaction of the remaining customary closing conditions.

NTG comprises Gamestec Leisure, Playnation, Astra Games, Bell-Fruit Group, Harlequin Gaming and Innov8 Gaming, with Inspired stressing that it expects to achieve between $12.3m to $13.3m of synergies through shared costs and increased scale.

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Relating to terms and conditions which prevented players from “getting hold of their money in one go,” the CMA acknowledges the cooperation of both organisations throughout the process, which has seen a formal agreement of removal.

Players of both portals could be made to make withdrawals in installments over an extended period of time, which the CMA states “could lead some to gamble again where they might otherwise make a withdrawal”.

George Lusty, senior director for consumer protection at the CMA, explained: “People choosing to gamble online should be able to walk away with their own money whenever they want to.

“Jumpman Gaming and Progress Play are the first to commit to scrap their unfair withdrawal rules, but we expect companies across the sector to follow suit, so no-one gets caught out with unfair terms and conditions when gambling online.”

Both firms have agreed to stop using unfair terms, meaning money could be confiscated if no log-in had been made within a certain timeframe, whilst Progress Play has also agreed to not confiscate money if certain identity check rules are not met in a certain amount of time.

Detailing moves being made by Jumpman Gaming and Progess Play, the CMA stated in its media release “whilst companies need to be able to make appropriate and proportionate identity checks to help prevent money laundering and fraud, they cannot justify confiscating someone’s money simply because they do not provide information within a specific time frame.”

Changes made have also been welcomed by UK regulator the Gambling Commission, which states firms across the sector should apply similar such standards, and failure to do so could result in further action.

Paul Hope, executive director of the Gambling Commission, added: “We support the outcome of the CMA’s investigation, and we’re pleased that both of the operators involved have committed to making changes, that will make it fairer and simpler for customers to withdraw funds from their online gambling accounts.

“Gambling firms should not be placing unreasonable restrictions on when and how consumers can take money out of their accounts.

“We now expect all online operators to review the findings published by the CMA today and ensure they update their own practices.”

The CMA and Gambling Commission have been working to improve terms and conditions for online players, and to help ensure organisations do not break consumer protection law.

Amongst the help guides produced is a ‘60-second summary’ to help all gambling operators review their practices and ensure their terms and conditions are in line with consumer protection law, as well as ‘advice for gamblers’ and a short video guide for consumers.

Gambling Commission figures for 2016/17 valued the online gambling sector at £4.9bn, accounting for 34 per cent of all gambling.

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The CMA report states gambling firms must “stop unfair online promotions that trap players’ money,” with changes now having to be adopted across the sector.

Three operators have already committed to make changes – Ladbrokes, William Hill and PT Entertainment, a Playtech subsidiary, are to change the way in which bonus promotions are offered, to ensure players can always access and release their own money.

Specifically the CMA set out a trio of factors, detailing what the changes mean:

• Players won’t be required to play multiple times before they can withdraw their own money
• Gambling firms must ensure that any restrictions on gameplay are made clear to players, and cannot rely on vague terms to confiscate players’ money
• Gambling firms must not oblige players to take part in publicity

If the whole sector does not “promptly adopt similar changes,” firms will be facing regulatory action from the Gambling Commission.

The CMA has stated that undertakings requires the majority of practices to be amended by 28 February of this year, with a later date of 31 July 2018 set for the implementation of prompts for consumers when they are playing with restricted funds.

George Lusty, Project Director at the CMA, commented: “Gambling always carries a risk, but players should never face unfair restrictions that prevent them from getting at their money. Firms mustn’t stack the odds against players, by putting unfair obstacles in their way, or making it difficult for them to stop gambling when they want to.

“The CMA is here to make sure businesses’ terms and practices are fair for their customers. We welcome the commitment from these leading firms to address the problems our investigation uncovered, by making important changes to their terms and conditions.

“We now expect others to follow, and look forward to the Gambling Commission’s continued work to make sure all operators in this sector play fair with their customers’ money.”

Sarah Gardner, Gambling Commission Executive Director, added: “We back the action taken by the CMA today. Gambling firms must treat their customers fairly and not attach unreasonable terms and conditions to their promotions and offers.

“We expect all Gambling Commission licensed businesses to immediately review the promotions and sign up deals they offer customers and take whatever steps they need to take, to the same timescales agreed by the three operators, to ensure they comply.

“Operators should be very aware that we will continue to work closely with the CMA to ensure customers are getting a fair deal across the gambling industry.”

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