Canada’s competition watchdog is suing Google for alleged anti-competitive behaviour in the online advertising market, making it the latest enforcement agency to challenge a crucial part of the technology giant’s business.

The Competition Bureau, an independent law-enforcement agency tasked with protecting and promoting competition, filed an application on Thursday asking the Competition Tribunal to force Google GOOGL-Q to sell two of its ad technology tools, pay a penalty and stop engaging in the allegedly anti-competitive conduct.

Google’s alleged anti-competitive behaviour includes tying its various ad technology tools together to maintain its market dominance, sometimes taking a loss, to disadvantage its competitors and dictating the terms on which its customers could transact with rival ad technology tools, according to the bureau.

“The Competition Bureau conducted an extensive investigation that found that 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. Google’s conduct has prevented rivals from being able to compete on the merits of what they have to offer, to the detriment of Canadian advertisers, publishers and consumers,” Matthew Boswell, Commissioner of Competition, said in a press release.

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Dan Taylor, vice-president of global ads at Google, said in a statement that the company’s advertising technology tools “help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers.”

“The [Competition Bureau] complaint ignores the intense competition where ad buyers and sellers have plenty of choice and we look forward to making our case in court,” Mr. Taylor said.

The move by the bureau is the latest in series of actions taken by jurisdictions around the world that accuse Google of abusing its market dominance in online advertising and engaging in monopolistic practices.

The bureau’s case concerns the technology that serves up online ads to internet users around the world. There are tools for online publishers to sell ad space, tools for advertisers to purchase that ad space and exchanges that match buyer and seller, all within a fraction of a second.

Google, owned by parent company Alphabet Inc., is heavily involved in each step. More than 75 per cent of its US$307-billion in revenue last year came from online advertising.

The bureau said it conducted a thorough investigation into Google’s conduct in Canada, which found that more than 200 billion Canadian online ad transactions flowed through the company’s ad technology tools in 2022, giving the company the largest scale and reach in the industry.

Google has “near-total control” of the technologies underlying the buying and selling of internet ads, according to the bureau.

The bureau’s allegations mirror those made by the U.S. Department of Justice, which sued Google in January, 2023, and accused it of abusing a monopoly in several areas of online advertising. That case has already gone to trial, and closing arguments were made this week with a ruling expected by the end of the year. If the U.S. judge decides that Google has engaged in illegal, monopolistic practices, further hearings will be held to determine remedies.

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The company defended itself in that case in part by arguing that the online ad market is in fact competitive, and that advertisers are spending more money on social-media platforms such as Facebook and TikTok.

The ad-market case is the second antitrust case launched recently by the U.S. Department of Justice against the technology giant.

Earlier this year, in a separate, landmark case, a U.S. judge ruled that Google had broken antitrust laws by striking multibillion-dollar deals with companies such as Apple, Samsung and Mozilla to ensure that its product was the default search engine that appears when users open a smartphone or a web browser.

The U.S. Justice Department and a number of states have asked the court to force Google to sell its popular web browser, Chrome, among other proposed remedies.

The European Commission also said last year that Google has breached antitrust rules by favouring its own ad technology to the detriment of competitors, advertisers and publishers. The EU’s antitrust head has said Google may have to sell part of its ad tech business. Google opposes divestment and has said the EU case rests on “flawed interpretations of the ad tech sector.”

In Canada, the bureau launched its probe into Google in 2020, initially focused on allegations that the company was “coercing” advertisers to use its ad-buying tools by excluding rivals from accessing ad space inventory on YouTube, according to a federal court application filed in January.

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In 2024, after the U.S. DOJ filed its lawsuit, the Canadian bureau said it had expanded the investigation beyond YouTube to examine Google’s business practices in the online ad market more broadly, including whether the company was using its market power to harm competition and deploying predatory pricing with respect to certain ad services, which involves setting prices deliberately low and incurring losses to thwart competitors.

This is not the bureau’s first investigation into Google. In 2013, it opened an inquiry into the company’s online search and advertising businesses. But three years later the bureau discontinued its probe, saying it did not find “sufficient evidence” that Google engaged in certain business practices for anti-competitive purposes. The watchdog stated at that time that it would closely monitor Google’s conduct.