Investigation into Google AdTech Practices · Case No. 23(1) of 2024

Case No. 23(1) of 2024

COMPETITION COMMISSION OF INDIA Case No. 23(1) of 2024 In Re:

Alliance of Digital India Foundation ... Informant AND

Alphabet Inc. ... Opposite Party No. 1 Google LLC ... Opposite Party No. 2 Google Ireland Limited ... Opposite Party No. 3 Google Asia Pacific Pte Limited ... Opposite Party No. 4 Google India Private Limited ... Opposite Party No. 5

CORAM Ravneet Kaur Chairperson Anil Agrawal Member Sweta Kakkad Member Deepak Anurag Member

ORDER UNDER SECTION 26(1) OF THE COMPETITION ACT, 2002

1. Information in Case No. 23 of 2024 has been filed by the Alliance of Digital India Foundation (‘ADIF’) under Section 19(1)(a) of the Competition Act, 2002 (the ‘Act’), against Alphabet Inc., Google LLC, Google Ireland Limited, Google Asia Pacific Pte Limited and Google India Private Limited (‘Google’), alleging contravention of the provisions of Section 4 of the Act.
2. ADIF is stated to be an alliance of individuals/ start-ups/ companies that aims to improve the start-up ecosystem in India and actively helps in identifying and dealing with issues concerning the growth and functioning of start-ups in India. ADIF, as a body, is stated to represent the interests of various stakeholders such as start-ups, app developers, etc. and espousing the objective of improving the start-up ecosystem of the country.
3. Alphabet Inc. is stated to be a US-based multi-national technology company engaged in the business of internet-related services and products. Google LLC, formerly Google Inc., is stated to be a Delaware limited liability company and wholly owned subsidiary of Alphabet Inc., its holding company. Google LLC provides a variety of information technology related services, with a principal focus on search, advertising, operating systems, platforms, and enterprise. It also offers an internet search service. Google Ireland Limited is stated to have been set up in 2003 as a subsidiary of Google LLC and is responsible for providing services to the company’s users in the European Economic Area and Switzerland. Google India Private Limited is an Indian subsidiary of Google LLC and has been stated to be appointed by Google Asia Pacific Pte Ltd., Singapore as a non-exclusive authorised reseller of online advertisement space in India provided by Google Asia Pacific Pte Ltd., through Google Ads program to advertisers in India.
4. All five Google entities together are stated to be a ‘group’ in terms of clause (c) of the Explanation to Section 4 read with clause (b) of the Explanation to Section 5 of the Act.
5. The Commission considered the Information in its ordinary meeting held on 08.01.2025, and vide an order of even date, sought response from Google thereupon. Google filed its response to the Information on 09.04.2025.
6. Thereafter, vide order dated 11.06.2025, the Commission, upon consideration of the matter, decided to pass appropriate order(s) in due course.
7. The present is one of such order(s) passed.
8. At the outset, it is noted that allegations purporting to distinct markets and different products/ conducts of Google have been levelled in the Information filed in Case No. 23 of 2024.
9. As such, the Commission decides to segregate the said matter into three sub-cases viz.

• (a) Case No. 23(1) of 2024 which shall deal with the allegations of abuse of dominance by Google in the Online Display Advertising services market through its Google AdTech Stack;
• (b) Case No. 23(2) of 2024 which shall deal with the allegations of abuse of dominance by Google in the Online Search Advertising services market through its Google Ads Policies; and
• (c) Case No. 23(3) of 2024 which shall deal with the remaining miscellaneous allegations of abuse of dominance by Google of (i) leveraging its dominant position in the general search market to increase profits from online search advertising market by imposing unfair conditions (including pricing conditions), (ii) indulging in non-transparent ad review and ad redressal process under inconsistent Google policies, and (iii) removing third-party cookies from websites under its ‘Privacy Sandbox’ in Chrome browser.

10. Accordingly, in the present matter, the Commission shall analyse the allegations made by ADIF regarding abuse of dominance by Google in the Online Display Advertising services market through its Google AdTech Stack.
11. There are two forms of digital advertising, online search advertising and online display advertising. Online search advertising is when an advertiser pays for its advertisement to appear on the search engine results page (‘SERP’) with ‘sponsored link’ below the results, from a user’s search on an internet search engine. The reason behind advertisers opting for search ads is because search-users generally tend to click mostly on the top few search results on the SERP. Google provides online search advertising services through its Google Ads, formerly known as Google AdWords.
12. On the other hand, online display advertising refers to placement of visual ads (banners, images, videos) on websites, mobile apps, or other digital platforms. They are ads that appear in the advertisement space (or ‘ad inventory’) of a third-party website. As per ADIF, Google provides all types of Online Display Advertising, including advertising in banners or videos on webpages, in mobile apps, and alongside social media content.
13. ADIF has stated that online advertising services are not substitutable with offline advertising services. Further, online search advertising is also not substitutable with online display advertising because the process of advertisement in online search advertisement is different from the online display advertising. Advertisers using online search advertising target in-market consumers who have already shown interest in their product or services. On the other hand, advertisers using online display advertising target out-market consumers through raising brand awareness. Search ads are considered ‘pull’ advertising while display ads are considered ‘push’ advertising.
14. In the Online Display Advertising market, ‘Publishers’ are those entities which sell their ad inventory, while ‘Advertisers’ are those entities who compete for the ad inventories of publishers. There are two ways for publishers to sell their ad inventories to advertisers. First is directly approaching the advertisers. While this may be feasible for big enterprises, who are in a position to directly approach and negotiate with big advertisers, the same is not feasible for smaller websites/ publishers. Therefore, they use the second approach viz. participate in ‘programmatic advertising’ to sell their ad inventories to advertisers. In this structure, there are several intermediaries involved, Ad Server, Supply Side Platform (‘SSP’), Ad Exchange, and Demand Side Platform (‘DSP’), which are run by algorithms, that automatically connect a number of publishers with number of advertisers in real time. Publishers hence, get benefitted by real time bidding, run by these intermediaries.
15. As per ADIF, programmatic sale of advertising space is not substitutable with direct sale of advertising space. Direct sales are based on an agreement between the publisher and advertiser specifying the number of impressions to be shown in a specified period of time, the pacing of the ads and their placement within the publisher’s website, and the price. The costs involved in direct negotiation for display advertising are generally higher than programmatic sales, particularly as they typically involve the most attractive inventory. Many publishers are unlikely to have the time, resources or expertise to sell all ad inventory on their websites via direct deals. On the other hand, in programmatic advertising, for advertisers who want to display their advertisements on the website of a publisher, the advertiser can programmatically bid on the advertisement inventory of the publisher. It provides the advertisers opportunity to decide whether to buy a given impression in ‘real time’ based on information not only about the context in which the ad will be displayed, but also permits targeting their marketing messages to particular audiences on the basis of detailed consumer profiles.
16. ADIF has also submitted that open online display channels are not substitutable with closed owned and operated (‘O&O’) online display channels which are often referred to as ‘walled-garden’. Walled gardens are closed platforms where users experience and interact with services, apps and content that is presented to them by those in control of the concerned ecosystem. For closed channels there is a publisher which sells very large volumes of ad inventory and has significant resources to sell its own ad inventory directly to advertisers using its own systems. However, in open channels, instead of a single source publisher, there are a wide range of publishers (blogs, online newspaper websites, etc.) which compete to sell their inventory to a wide range of advertisers through complex intermediation services offered at various levels of the ad-value chain.
17. In the above background, ADIF has made allegations with respect to the conduct of Google vis-à-vis programmatic bidding on open channels, stating that Google dominates across the value chain of Online Display Advertisement Market including all the intermediaries and platforms involved, and unfairly abuses the process.
18. The various operators in the value chain of display advertising intermediation ecosystem are collectively called as ‘AdTech Stack’. The ‘AdTech Stack’ is an intermediary chain containing all technologies (including SSPs, Ad Exchanges and DSPs) that enable the process of online display advertisements. The AdTech Stack facilitates the programmatic buying and selling of ad inventories through a bidding process. There are a total of seven key intermediaries in AdTech Stack. These key intermediaries can be broadly divided into the following three parts:
19. Publisher Ad Servers are tools that publishers use to organize and manage their ad inventory. SSPs are platforms used by publishers in automating the sale of their inventory and in choosing the most profitable advertisement to display. On the other hand, Advertiser Ad Servers are tools that advertisers use to manage and track all ads and campaign information in one location. DSPs are platforms used by advertisers to help them purchase ad inventory from suppliers of ad inventory as effectively and cheaply as possible, according to the parameters set by the advertiser. DSPs are used by advertisers to connect to Ad Exchange/ SSPs/ ad networks and buy ad inventory of publishers. Ad Exchange is an intermediary platform that facilitates the buying and selling of ad inventory between publishers and advertisers through their agencies. The Ad Exchange receives a request from the seller side to auction ad impressions. The Ad Exchange solicits bids on the impression from the buyer side, chooses winning bids and transmits information on the winning bids back to the seller side.
20. As per ADIF, Google Ad Manager (‘GAM’) is Google’s publisher-facing platform. ‘AdX’ is Google’s Ad Exchange. Formerly, Google also had a separate Publisher Ad Server/ SSP viz. DoubleClick for Publishers (‘DFP’). Google Display & Video 360 (‘DV360’) (for bigger advertisers) and Google Ads (for smaller advertisers) are Google’s DSPs.
21. As per ADIF, Google operates its services across the entire AdTech supply chain, and is the largest provider of AdTech services at each level of the supply chain. In fact, Google is the only company that offers AdTech services across the entire AdTech supply chain. Further, Google is a dominant player in digital advertising across ad formats. This is by virtue of its market share in terms of ad inventory and revenue, access to large troves of consumer data, cross linkages across different service offerings and ensuing network effects, and significant entry barriers which no new player can match or overcome. Google is hence, prima facie dominant in the overall relevant market for online display advertising services in India even when analysed in terms of factors stated under Section 19(4) of the Act. The French Competition Authority in its Google Display Advertising decision (Decision 21-D-11) dated June 7, 2021 has also found Google to be dominant in the market for platforms for the sale of online non-search advertising space i.e., market for online display advertising services.
22. As per ADIF, Google’s dominance in the online advertisement markets has led to an anti-competitive environment and harmed the stakeholders of the market, as the nascent AdTech competitors are being driven out of the market. Hence, due to the lack of any effective alternative to Google’s services, advertisers and publishers are dependent on Google. This helps Google assert its dominance over advertisers and publishers by imposing exploitative prices (Google takes a nearly 35% cut from the earnings from digital advertisers), forcing unfair conditions, not maintaining any transparency, etc.
23. ADIF has also submitted that Google is in a dominant position both in the separate relevant markets for SSPs, Ad-Exchanges and the supply of DSPs for open online display advertising in India.
24. ADIF has alleged that Google has abused its dominant position in the online open display advertising services market, on at least, four counts:

• (a) self-preferencing by tying the services of its Publisher Ad Server/ SSP (DFP) with Ad Exchange (AdX) and offering them as a single GAM function, in contravention of the provisions of Sections 4(2)(a)(i), 4(2)(b)(i) and 4(2)(c) read with section 4(1) of the Act;
• (b) self-preferencing by tying the services of its SSP (DV360) with Ad Exchange (AdX) in contravention of the provisions of Sections 4(2)(a)(i), 4(2)(b)(i) and 4(2)(c) of the Act; and
• (c) self-preferencing by linking access to its vertical’s YouTube ad inventory to the use of its SSP DV360, in contravention of the provisions of Sections 4(2)(c), 4(2)(d) and 4(2)(e) read with section 4(1) of the Act; and
• (d) indulging in Dynamic Allocation, ‘Last Look’ advantage, non-participation in Header Bidding, Open Bidding, Unified Pricing Rules, etc.

25. ADIF has also submitted that Google offers intermediation services in the online advertising market through its AdSense for Search. As per ADIF, by determining which advertiser ‘wins’ an ad placement and by determining fees across the AdTech stack in a non-transparent manner, Google is also in contravention of the provisions of Section 4(1) read with Section 4(2)(c) of the Act.
26. With respect to each of the above allegations, ADIF has, inter alia, stated as under:

• 26.1 On tying of DFP with AdX
• 26.1.1 Historically, the functions that an SSP conducted were performed by two separate platforms: the Ad Exchange would run auctions on the demand side to select which advertiser’s bid would win an ad impression and the SSP would make decisions to maximise the price at which ad inventory is sold, such as setting price floors and deciding which buyers can bid for particular ad inventory.
• 26.1.2 However, over time, Google tied its Ad Exchange function with SSP (as a single offering called GAM) functions so that both the roles outlined above are now generally performed by SSP. Google modified the working of its SSP (DFP) in such a manner post launch of its AdX in 2009 that certain features of the same became unavailable to other Ad Exchanges.
• 26.1.3 In 2018, Google changed its contract to rebrand DFP and AdX as a single offering called GAM. Google eliminated separate agreements for AdX and DFP, thus, tying DFP and AdX, forcing publishers to a combined contract for both DFP and AdX. Currently, as DFP and AdX are tied, it is impossible for a publisher to access AdX without using DFP. If a publisher is to access the largest source of available advertiser demand, it must license DFP as its SSP although GAM, DFP and AdX are separate products. DFP and AdX continue to function as before, providing the same ad-serving and Ad Exchange functionality that existed before Google introduced GAM.
• 26.1.4 However, publishers are forced to use DFP because Google permits publishers to clear transactions for impressions through AdX, only if the publisher is using DFP. For many publishers, AdX is a must-have Ad Exchange because AdX provides access to as many sources of demand as possible, which has a significant impact on publishers’ revenues. Google however, permits AdX to bid in real time, only if a publisher licenses DFP. With a different ad server, AdX would not enter bids in real time. This arrangement made no short-term economic sense for Google, because an Exchange placing static bids, which are systematically lower than real-time bids, is less likely to win an impression. A lower win rate, in turn, generates less money for the Ad Exchange, as an Ad Exchange can take its revenue share only if it wins the impression. Google however, decided to forgo immediate revenue from real-time bids in order to exercise control in the supply side market. With the largest cross section of advertiser demand captured in AdX, and by offering more valuable, real-time bids only to publishers using DFP, publishers are coerced to use DFP as their SSP. Publishers cannot afford to forgo the most valuable real time bids from the largest Exchange, even though they may not want to hand over control of their inventory to Google. Google thus, forces publishers to use DFP for trading through its Ad Exchange. On the other hand, Google does not allow third-party SSPs to meet the demand from AdX under conditions equivalent to those offered by DFP.