Turkish regulator fines Google $82m for favoring own ad exchange platform AdX
Competition authority finds Google abused dominance in publisher ad server market by giving preferential treatment to its AdX platform.
Two days ago, on Friday, December 13, 2024, the Turkish Competition Authority imposed a 2.6 billion Turkish lira (approximately $82 million) fine on Google for abusing its dominant position in the publisher ad server market by favoring its own supply-side platform, AdX (now Google Ad Manager).
According to the official decision document, the Competition Board's investigation, which began on May 18, 2023, examined how Google leveraged its position across multiple layers of the advertising technology stack. The investigation specifically focused on the relationship between Google's publisher ad server and its supply-side platform, AdX.
The Competition Board determined that Google held a dominant position in the publisher ad server services market. Publisher ad servers are crucial technological tools that websites use to manage their advertising inventory. These servers decide which ads appear on websites and when they should be displayed.
The investigation revealed that Google had used its control over the publisher ad server market to gain what the authority termed an "unfair advantage" for AdX, its supply-side platform. Supply-side platforms are technological services that help publishers sell their advertising space to advertisers through automated auctions.
According to the decision document, Google's self-preferencing practices "could complicate the activities of its rivals and was in violation of Article 6 of the Act no 4054 on the Protection of Competition." The authority found that Google's practices effectively directed advertising demand from its own demand-side platforms toward AdX, potentially limiting competition in the market.
The Competition Board's remedy goes beyond the monetary penalty. Within six months of receiving the official notification, Google must provide third-party supply-side platforms with conditions "which may not be less favorable than those applied to its own services." This requirement aims to level the playing field in the advertising technology market.
The financial penalty of 2,607,563,963.59 Turkish lira was calculated as a percentage of Google's annual gross revenues for 2023. The authority has also included provisions for additional daily fines if Google fails to implement the required changes within the specified timeframe.
The decision highlights the complex nature of competition in digital advertising markets. The vertical integration of advertising technology services – from publisher ad servers to supply-side platforms – creates potential opportunities for market distortion that competition authorities increasingly scrutinize.
To ensure compliance, the Competition Board has established specific implementation requirements. The decision document outlines that Google must modify its practices to provide equal treatment to third-party supply-side platforms, effectively ending the preferential treatment previously given to AdX.
The Turkish Competition Authority's decision represents a significant development in the oversight of advertising technology markets. By addressing the relationship between publisher ad servers and supply-side platforms, the authority has tackled a fundamental aspect of how digital advertising markets function.
The case remains subject to appeal, with Google having 60 days following the notification of the reasoned decision to file an appeal before the Ankara Administrative Courts. This appeals provision ensures due process while maintaining pressure for market reforms.
Luís Rijo
This regulatory action demonstrates the increasing sophistication of competition authorities in addressing complex digital market structures. The decision provides a detailed framework for understanding how dominant positions in one market segment can affect competition in related markets within the advertising technology stack.
The implementation of these changes could significantly impact how digital advertising markets operate in Turkey. By requiring equal treatment for third-party supply-side platforms, the decision aims to create more competitive conditions in the digital advertising ecosystem.