Canada's antitrust watchdog said Thursday it is suing Google over alleged anticompetitive conduct in the tech giant's online advertising business and wants the company to sell off two of its ad tech services and pay a penalty.

The Competition Bureau said that such action is necessary because an investigation into Google found that the company "unlawfully" tied together its ad tech tools to maintain its dominant market position.

The matter is now headed for the Competition Tribunal, a quasi-judicial body that hears cases brought forward by the competition commissioner about non-compliance with the Competition Act.

The bureau is asking the tribunal to order Google to sell its publisher ad server, DoubleClick for Publishers, and its ad exchange, AdX. It estimates Google holds a market share of 90% in publisher ad servers, 70% in advertiser networks, 60% in demand-side platforms and 50% in ad exchanges.

This dominance, the bureau said, has discouraged competition from rivals, inhibited innovation, inflated advertising costs and reduced publisher revenues.

"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," Matthew Boswell, Commissioner of Competition, said in a statement.

Google, however, maintains the online advertising market is a highly competitive sector.

Dan Taylor, Google's vice president of global ads, said in a statement that the bureau's complaint "ignores the intense competition where ad buyers and sellers have plenty of choice."

The statement added that Google intends to defend itself against the allegation.

U.S. regulators want a federal judge to break up Google to prevent the company from continuing to squash competition through its dominant search engine after a court found it had maintained an abusive monopoly over the past decade.

The proposed breakup, floated in a 23-page document filed this month by the U.S. Department of Justice, calls for sweeping punishments that would include a sale of Google's industry-leading Chrome web browser and impose restrictions to prevent Android from favoring its own search engine.

U.S. District Judge Amit Mehta ruled in August that "Google is a monopolist, and it has acted as one to maintain its monopoly." He outlined a timeline for a trial on proposed remedies next spring and plans to issue a decision by August 2025.

Mehta also found that Google in 2021 Google paid about $26 billion to Apple and other partners to ensure its search engine would be the default one on internet browsers.

His ruling stemmed from a Justice Department antitrust lawsuit first filed against Google in October 2020 during the first Trump administration.

Google has already said it plans to appeal Mehta's ruling, but the tech giant must wait until he finalizes a remedy before doing so. The appeals process could take as long as five years, predicts George Hay, a law professor at Cornell University who was the chief economist for the Justice Department's antitrust division for most of the 1970s.

And in January 2023, the Justice Department and several states filed a separate lawsuit against Google claiming it has an illegal monopoly over online advertising.

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