Canada’s Competition Bureau filed a lawsuit against Google on Thursday, alleging anti-competitive practices in the tech giant’s online advertising business.

The authority is demanding that Google get rid of two of its key ad technology tools – DoubleClick for Publishers (DFP) and AdX – and pay a fine to comply with the country’s competition law.

The lawsuit, filed at the competition tribunal, follows a multi-year investigation into Google’s dominance of the digital advertising market. According to the Bureau, Google has a market share of 90 percent in publisher ad servers, 70 percent in advertiser networks, 60 percent in demand platforms and 50 percent in ad exchanges in Canada.

This dominance, the bureau argues, discourages competition, stifles innovation, increases advertising costs and reduces revenue for publishers.

The agency’s investigation concluded that Google used its control over the ad stack — a set of tools that allow publishers and advertisers to buy and sell digital ad inventory through automated auctions — to illegally maintain and consolidate its market power. The main allegations include:

• Product bundling: Google has reportedly bundled its ad tech tools, forcing advertisers and publishers to use its entire ecosystem. For example, advertisers could only access real-time bidding 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, in certain cases incurring financial losses to disadvantage competitors, and imposing restrictive terms on publishers using competing platforms.

“Google has abused its dominant position in online advertising in Canada by engaging in conduct that blocks market participants from using its own ad technology tools, excludes competitors and distorts the competitive process,” Matthew Boswell, Canada’s competition commissioner, said in a statement. .

The Competition Authority is seeking a penalty equal to three times the financial benefit Google received from its alleged anti-competitive practices – or 3% of Google’s worldwide gross revenue, if the exact amount is indeterminate. The authority is also seeking an order prohibiting Google from continuing these practices in Canada.

The case represents one of several international challenges to Google’s dominance in digital advertising. In the US, the Justice Department recently concluded its closing arguments in a similar antitrust case. Google has also faced investigations and lawsuits in the European Union, where earlier this year it offered to sell its ad exchange to end an antitrust investigation.

The outcome of the case will be decided by the Competition Tribunal, an independent judicial body. According to her instructions, Google has 45 days to submit a response.

Digital advertising uses ad technology tools to match advertisers with publishers offering ad space. Google owns several of the biggest tools in this ecosystem, including DFP, AdX, Display & Video 360, and Google Ads. In 2022, more than 200 billion Canadian ad transactions will pass through the Google ad technology stack.

The board argues that Google’s dominance is not the result of superior products, but rather strategic actions designed to eliminate competition. The moves, the Bureau argues, insulated Google from competitive pressure and hurt Canada’s digital economy.

The case will now go to the competition tribunal, which will decide whether Google must comply with the authority’s demands. The outcome could set a precedent for the regulation of tech giants in Canada and beyond.