Ad-Tech Supply Chain Fragmentation And Hidden Monopolies

1. Introduction

Ad-Tech (advertising technology) supply-chain fragmentation refers to the situation where digital advertising is divided among many apparently separate technological layers, while a small number of firms may control several important layers simultaneously.

A typical programmatic advertising transaction can involve:

Advertiser → DSP → Ad Exchange → SSP → Publisher Ad Server → Publisher → User

There may also be:

identity providers;

data brokers;

measurement providers;

verification companies;

consent-management platforms;

attribution providers;

cloud infrastructure;

browsers;

operating systems;

app stores;

payment systems.

The European Commission's description of the ad-tech industry identifies, among other layers, publisher ad servers, ad exchanges, and advertiser ad-buying tools, and its 2025 materials concerning Google's ad-tech investigation specifically analysed Google's positions across several of those layers. (European Commission)

The central legal issue is therefore not simply:

"Is there one monopoly?"

It may instead be:

"Can control over several interconnected layers create a form of market power that is difficult to see if every layer is examined separately?"

This is the meaning of a hidden or vertically embedded monopoly in the ad-tech context.

2. Meaning of Ad-Tech Supply-Chain Fragmentation

The digital advertising supply chain can be divided into several markets.

Advertiser side

Advertisers purchase advertising inventory through:

demand-side platforms (DSPs);

agency platforms;

search advertising systems;

social-media advertising systems.

Intermediary side

Intermediaries may include:

ad exchanges;

SSPs;

trading platforms;

real-time bidding systems.

Publisher side

Publishers may use:

publisher ad servers;

inventory-management systems;

header-bidding technology;

audience-management tools.

Data side

Advertising decisions can additionally rely on:

cookies;

first-party data;

third-party data;

identity graphs;

contextual data;

device information.

Measurement side

Advertisers may depend upon:

attribution;

conversion measurement;

viewability;

fraud detection;

brand-safety systems.

Thus, an apparently competitive system can contain significant concentration at several individual points.

3. What Is a "Hidden Monopoly"?

"Hidden monopoly" is not itself a formal EU legal category.

It is better understood as a descriptive concept involving situations where:

market power is distributed across several connected layers;

one undertaking controls more than one layer;

users depend upon interoperability between those layers;

switching between suppliers is difficult;

data advantages reinforce the position;

competitors cannot obtain equivalent scale or information;

the firm can potentially favour its own downstream services.

The legal analysis still has to establish the conventional requirements of:

Relevant Market + Dominance + Conduct + Foreclosure/Restriction + Causation/Effects.

4. Why Ad-Tech Is Particularly Vulnerable

Ad-tech markets have characteristics that can reinforce concentration.

A. Network Effects

More advertisers attract more publishers.

More publishers attract more advertisers.

This creates:

Advertisers → more demand → more publishers → more inventory → more advertisers

A successful intermediary may therefore become increasingly difficult to challenge.

B. Data Advantages

An ad-tech company operating multiple layers can potentially observe:

advertiser demand;

publisher inventory;

bids;

winning prices;

user interactions;

conversion information;

performance metrics.

This can create an informational advantage over rivals.

C. Switching Costs

Publishers may have invested heavily in:

APIs;

ad tags;

reporting systems;

contracts;

historical data;

technical integrations.

Consequently, switching may be commercially difficult even when alternative providers exist.

D. Interoperability

A DSP may need access to:

exchanges;

publisher inventory;

identity systems;

measurement tools.

A publisher may need:

SSPs;

ad exchanges;

demand sources;

verification systems.

Control over an important interface can therefore produce significant leverage.

5. Vertical Integration

The most important issue is vertical integration.

Imagine one company operates:

Publisher Ad Server
↓
Ad Exchange
↓
DSP

The same company may therefore have interests on both sides of the transaction.

The potential conflict is:

Should the intermediary make an advertising transaction based purely on competition between market participants, or could it structure the system in a way that advantages its own services?

This is precisely the type of issue that European competition law can examine.

6. Current European Ad-Tech Context

The European Commission's 2025 ad-tech decision concerning Google is particularly important to this subject. The Commission found that Google had breached EU antitrust rules by favouring its own online display advertising technology services and imposed a €2.95 billion fine, together with measures aimed at addressing conflicts of interest across the ad-tech supply chain. The Commission's current materials state that Google submitted a proposal in November 2025, which the Commission was evaluating. (Digital Markets Act (DMA))

The Commission's detailed decision analysed Google's positions in multiple layers. It concluded, among other things, that Google had held a dominant position in the EEA-wide market for programmatic ad-buying tools for the open web since at least 2014 and had been dominant in publisher ad servers for online display advertising since at least 2014. (European Commission)

This is particularly relevant to the concept of supply-chain fragmentation, because the legal analysis did not treat ad-tech as one undifferentiated market.

7. Relevant EU Competition Law

Article 101 TFEU

Article 101 addresses agreements and coordinated practices that restrict competition.

Potential ad-tech examples include:

coordinated exclusion of rival exchanges;

agreements restricting multi-homing;

restrictive contractual arrangements;

information-sharing arrangements;

coordinated pricing mechanisms.

Article 102 TFEU

Article 102 concerns abuse of a dominant position.

Potential ad-tech conduct includes:

self-preferencing;

tying;

discriminatory access;

exclusionary rebates;

refusal to supply;

discriminatory interoperability;

leveraging dominance from one layer into another;

manipulation of auction mechanisms.

8. Digital Markets Act

The Digital Markets Act (DMA) adds an ex-ante regulatory layer for designated gatekeepers.

The DMA contains provisions relevant to advertising transparency and access to advertising-performance information. For example, the Commission states that Article 5(10) gives publishers a parallel right and Article 6(8) requires gatekeepers, on request and free of charge, to provide advertisers and publishers—and authorised third parties—with access to performance-measurement tools and necessary aggregated and non-aggregated data for independent verification. (Digital Markets Act (DMA))

This is important because information asymmetry is one of the major potential sources of hidden power in fragmented ad-tech chains.

9. Case Law

There are relatively few EU judgments specifically concerning the complete modern programmatic ad-tech stack. Therefore, the following cases include direct digital cases and important competition-law precedents that apply by analogy.

Case 1: Google and Alphabet v Commission — Google Shopping

CJEU, C-48/22 P, 10 September 2024

This is one of the most important modern EU cases concerning self-preferencing and leveraging.

The Commission had found that Google favoured its own comparison-shopping service in general search results.

The General Court substantially upheld the Commission's decision, and the CJEU dismissed Google's appeal. (curia)

Principle

A dominant undertaking can infringe Article 102 where it uses its position in one market or layer to advantage its own service in another competitive area.

The CJEU considered issues including:

leveraging;

self-preferencing;

foreclosure capability;

effects on competition;

causal links;

competition on the merits. (Infocuria)

Ad-Tech Application

Suppose a firm controls:

Ad Exchange + DSP + Publisher Ad Server

and gives preferential treatment to its own DSP or exchange.

The Google Shopping reasoning provides an important framework for examining whether such conduct goes beyond competition on the merits.

Case 2: Meta Platforms and Others

CJEU, C-252/21, 4 July 2023

This case concerned Meta's processing and combination of data obtained from Facebook and from activities on other services and websites.

The German competition authority had examined whether the processing of "off-Facebook" data formed part of an abuse of a dominant position.

The CJEU held that a national competition authority may, in examining abuse of dominance, take account of GDPR compliance, while respecting the competence of data-protection authorities and the principle of sincere cooperation. (curia)

Principle

Competition law and data protection law can interact where data practices are connected with the exercise of market power.

Ad-Tech Application

This is highly relevant to:

cross-platform tracking;

identity graphs;

audience profiling;

combining first-party and third-party data;

behavioural advertising.

A firm controlling several ad-tech layers may obtain data advantages that competitors cannot replicate.

Case 3: Bronner

CJEU, C-7/97, 26 November 1998

This case concerned access to a newspaper home-delivery network controlled by a dominant undertaking.

The CJEU established a demanding framework for when refusal to provide access to infrastructure can constitute abuse of dominance. (Infocuria)

Principle

A refusal to provide access to an infrastructure is not automatically abusive merely because competitors would benefit from access.

The facility generally must be sufficiently indispensable and the refusal must satisfy the established conditions for an abusive refusal to supply.

Ad-Tech Application

Consider an ad-tech infrastructure that is allegedly indispensable:

Publisher ad server → exchange → auction infrastructure

A smaller rival may argue:

"Without access to this infrastructure, we cannot compete."

Bronner provides the starting point for analysing whether the infrastructure is genuinely indispensable or whether alternative routes exist.

Case 4: IMS Health v NDC Health

CJEU, C-418/01, 29 April 2004

This case concerned access to a particular data structure used for pharmaceutical sales information.

The CJEU examined the circumstances in which refusal to license an indispensable input could constitute abuse of dominance. It recognised the relevance of an upstream product being indispensable to a downstream market. (Infocuria)

Principle

An upstream resource can become legally significant when it is indispensable for competing in a downstream market.

Ad-Tech Application

Potentially relevant examples include:

proprietary audience data;

unique identity infrastructure;

essential measurement data;

access to particular inventory;

unique interoperability interfaces.

However, IMS Health does not mean that every valuable ad-tech dataset must be shared. The strict conditions for refusal-to-license cases remain important.

Case 5: Deutsche Telekom v Commission

CJEU, C-280/08 P, 14 October 2010

This is the classic margin-squeeze case.

Deutsche Telekom was found to have engaged in conduct that squeezed competitors' margins between wholesale and retail prices. The CJEU confirmed that such conduct can constitute an abuse of dominance. (curia)

Principle

A vertically integrated dominant firm can abuse its position by structuring upstream and downstream prices so that equally efficient competitors cannot compete effectively.

Ad-Tech Application

Imagine:

Dominant upstream ad-tech infrastructure
+
Dominant downstream advertising service

If the firm's internal pricing structure allows it to disadvantage rivals operating only at the downstream level, a margin-squeeze analysis may become relevant.

Case 6: Post Danmark

CJEU, C-209/10, 27 March 2012

The case concerned selective pricing by a dominant postal operator.

The CJEU examined whether pricing practices had actual or likely exclusionary effects and emphasised that the existence of low or discriminatory prices alone does not automatically establish abuse. (Infocuria)

Principle

The competition analysis must examine:

exclusionary effects;

competitive structure;

actual or likely foreclosure;

objective justification.

Ad-Tech Application

Suppose an ad exchange offers:

very low fees to selected publishers;

preferential rebates to advertisers;

discriminatory terms to rival platforms.

The question would not simply be whether the prices are different, but whether the conduct can exclude competitors or otherwise harm competition.

Case 7: Google AdSense — Commission Decision AT.40411

European Commission, 20 March 2019

This is not a CJEU judgment but is directly relevant ad-tech precedent.

The Commission found that Google had imposed contractual restrictions on third-party websites using its AdSense search-advertising service, restricting competitors' ability to place search advertisements on those sites.

The Commission's published competition records classify the case as online search advertising and an Article 102 case. (Competition Policy)

Principle

Contractual restrictions within an advertising-intermediation platform can have competition-law significance where they limit rivals' access to advertising demand or inventory.

Ad-Tech Application

This is directly relevant to:

publisher exclusivity;

platform restrictions;

multi-homing;

rival DSP access;

contractual foreclosure.

Case 8: Google Android

General Court, T-604/18, 14 September 2022

The Android litigation concerned Google's practices involving the Android ecosystem and the relationship between different digital services.

Although not an ad-tech case itself, it demonstrates how competition analysis can examine ecosystem-level leveraging and tying rather than looking at one isolated product.

Ad-Tech Application

A digital company might control:

Operating System → Browser → Identity → Advertising → Measurement

The economic significance may therefore arise from the combination of positions, rather than one standalone service.

This is an important analytical tool for understanding hidden market power.

10. How Fragmentation Can Hide Market Power

Consider a hypothetical structure:

Each layer might appear to have competitors.

But the same undertaking may control several interconnected layers.

This creates a question of cumulative market power.

11. The "Hidden Monopoly" Problem

A traditional monopoly analysis might ask:

Who controls the market?

In ad-tech, a better set of questions is:

Who controls access?

Who controls data?

Who controls the auction?

Who controls measurement?

Who controls identity?

Who controls publisher inventory?

Who controls advertiser demand?

Who controls interoperability?

Who controls the rules?

Who sees competitors' transactions?

A firm need not have 100% of one market to possess significant strategic power across the ecosystem.

12. Information Asymmetry

One of the most important issues is information asymmetry.

Imagine a company operates:

DSP;

exchange;

publisher ad server.

It could potentially possess information concerning:

advertiser bids;

publisher floor prices;

competing bids;

auction outcomes;

conversion data;

inventory availability.

This creates an important competition-law question:

Can the vertically integrated intermediary use information obtained from one layer to compete unfairly at another layer?

The legal answer depends upon evidence of actual conduct and competitive effects.

13. Self-Preferencing

Self-preferencing occurs where a platform gives preferential treatment to its own products or services.

Examples could include:

ranking its own DSP more favourably;

giving its own exchange preferential access;

applying different auction rules;

giving its own service better technical integration;

giving its own measurement tool superior data access.

The Google Shopping judgment is especially relevant because the CJEU confirmed the Commission's finding of abuse involving Google's preferential treatment of its own comparison-shopping service. (curia)

14. Auction Manipulation

Programmatic advertising frequently operates through auctions.

A simplified system is:

Publisher inventory
↓
SSP / exchange
↓
Real-time bids
↓
Winning advertiser
↓
Advertisement displayed

Potential competition-law problems may arise if an intermediary:

manipulates ranking;

changes auction rules;

gives preferential treatment to its own bids;

uses competitors' bid information improperly;

discriminates between participants.

Evidence would be required to distinguish legitimate algorithmic optimisation from exclusionary conduct.

15. Data Monopoly

A data advantage can reinforce market power.

For example:

Search data + browser data + advertising data + publisher data + conversion data

may produce a broader information advantage than any individual competitor possesses.

The Meta judgment is particularly important because the CJEU recognised the potential interaction between dominance analysis and data-processing practices. (curia)

16. Network Effects and Feedback Loops

A hidden monopoly can develop through a feedback mechanism:

More advertisers
↓
More publisher participation
↓
More transactions
↓
More data
↓
Better optimisation
↓
Better performance
↓
More advertisers

This is called a data/network feedback loop.

It can create increasing advantages for an established platform.

But an economic advantage is not automatically an infringement of competition law. The legal question is whether the undertaking uses prohibited methods to strengthen or maintain dominance.

17. Switching Costs

A publisher may have to migrate:

historical data;

ad tags;

APIs;

reporting systems;

contracts;

identity technology;

consent systems.

A DSP may have to reconstruct:

campaign history;

targeting models;

measurement integrations;

audience segments.

These costs can reduce multi-homing and make customers dependent on one provider.

18. Interoperability as a Competition Issue

Modern ad-tech systems depend heavily on interoperability.

Examples:

DSP ↔ Exchange

Exchange ↔ SSP

SSP ↔ Publisher Ad Server

Measurement ↔ DSP

Identity Provider ↔ Advertising Platform

A dominant undertaking could potentially disadvantage rivals through:

API restrictions;

technical delays;

discriminatory access;

incompatible standards;

unequal data access.

The Bronner and IMS Health cases provide useful frameworks for analysing when access to an infrastructure or indispensable input becomes legally significant. (Infocuria)

19. Tying and Bundling

Suppose a dominant firm says:

"If you use our publisher ad server, you must also use our exchange."

Or:

"Advertisers using our DSP must use our measurement service."

This may create a tying/bundling issue.

The relevant questions include:

Are the products distinct?

Does the undertaking have dominance in the tying product?

Are customers forced or strongly incentivised to purchase the tied product?

Is there foreclosure?

Is there an objective justification?

20. Margin Squeeze

A vertically integrated ad-tech firm could potentially face a margin-squeeze allegation where:

Upstream price charged to rival
is sufficiently high while
downstream price charged by dominant firm
is sufficiently low,

making it difficult for an equally efficient rival to compete.

The Deutsche Telekom judgment provides the classic European framework. (curia)

21. Exclusive Dealing

Another potential problem is contractual exclusivity.

Examples:

Publisher agrees not to use rival SSPs.

or

Advertiser agrees to purchase all programmatic inventory through one DSP.

The legal analysis would consider:

duration;

coverage;

market power;

foreclosure;

alternatives;

efficiencies.

The Google AdSense decision provides an important direct example of contractual restrictions affecting access to online advertising markets. (Competition Policy)

22. Essential Facilities

An ad-tech platform may argue:

"Our technology is proprietary, so competitors have no right to access it."

A rival may respond:

"Without access, effective competition is impossible."

The Bronner and IMS Health doctrines provide the starting point.

However, European competition law does not automatically convert every commercially important platform into an essential facility.

Indispensability remains a demanding requirement. (Infocuria)

23. Relevant Market Definition

One of the hardest issues is deciding what the market actually is.

Possible markets include:

Market 1

Publisher ad servers.

Market 2

SSPs.

Market 3

Ad exchanges.

Market 4

DSPs.

Market 5

Programmatic ad-buying tools.

Market 6

Search advertising.

Market 7

Display advertising.

Market 8

Digital identity/advertising data.

Market 9

Ad verification.

The Commission's Google ad-tech analysis illustrates why different layers can be examined as separate markets. (European Commission)

24. Why Market Share Alone Is Not Enough

A company may have:

40% in one market;

50% in another;

60% in a third.

The combined strategic effect may be important.

But competition law does not simply add these percentages together.

The authority must establish:

Market power + dominance + abusive conduct + competitive effects.

Therefore:

Multiple large market shares ≠ automatic monopoly.

25. Remedies

Potential European remedies may include:

Behavioural remedies

non-discrimination;

interoperability;

data access;

transparency;

removal of exclusivity;

auction-rule changes;

information firewalls.

Structural remedies

In exceptional circumstances, structural separation may be considered.

DMA remedies

Where applicable, the DMA can impose specific obligations on designated gatekeepers.

Damages

Businesses harmed by an infringement may potentially bring damages claims under applicable national and EU competition-law mechanisms.

26. Civil Liability Dimension

Although the subject is primarily competition-law oriented, civil law becomes important after an infringement.

Potential claimants include:

publishers;

advertisers;

rival ad-tech companies;

agencies;

consumers, where legally available;

data subjects in appropriate circumstances.

Possible claims include:

damages;

restitution;

contractual invalidity;

injunctions;

recovery of overcharges;

compensation for lost revenue.

A competition authority's infringement decision can become important evidence in subsequent damages litigation.

27. Evidence in Hidden-Monopoly Litigation

Evidence may include:

Technical

API logs;

auction logs;

algorithmic rules;

bid histories;

system architecture.

Commercial

contracts;

rebates;

exclusivity clauses;

pricing documents;

internal strategy documents.

Data

identity data;

audience segments;

conversion data;

cross-platform information.

Economic

market shares;

switching costs;

entry barriers;

price effects;

foreclosure rates;

counterfactual analysis.

Algorithmic

ranking rules;

auction algorithms;

preferential treatment;

internal bidding logic.

28. Algorithmic Evidence

Ad-tech competition disputes may increasingly depend on algorithms.

Suppose an algorithm consistently gives the platform's own DSP:

faster access;

better bid information;

preferential ranking;

lower fees.

The court may need expert evidence to determine:

Algorithmic difference → competitive advantage → foreclosure → economic harm

The mere existence of an algorithmic difference does not itself prove unlawful discrimination.

29. Consumer Impact

Although ad-tech disputes are usually between businesses, consumers may ultimately experience:

less privacy;

higher advertising prices;

lower-quality digital services;

reduced choice;

reduced innovation;

excessive tracking.

The Meta judgment illustrates how data-protection concerns can intersect with competition law. (curia)

30. Supply-Chain Fragmentation Example

Consider this hypothetical system:

Advertiser
↓
DSP – Company A
↓
Exchange – Company A
↓
SSP – Company B
↓
Publisher Ad Server – Company A
↓
Publisher

Company A therefore controls both:

advertiser-side technology;

publisher-side technology.

It may also operate:

measurement;

identity;

data analytics.

The legal questions become:

Is Company A dominant in one or more relevant markets?

Are the markets economically interconnected?

Does Company A favour its own services?

Does it restrict rivals?

Does it use information obtained from one layer in another?

Are competitors equally able to access data?

Are switching costs significant?

Is the conduct capable of foreclosing competition?

Are there objective justifications?

Have advertisers or publishers suffered measurable harm?

31. Case-Law Comparison

32. Six Most Important Cases for Examination

If an answer requires exactly six major authorities, use:

1. Google and Alphabet v Commission — C-48/22 P

Self-preferencing and leveraging.

2. Meta Platforms — C-252/21

Data concentration and competition law.

3. Bronner — C-7/97

Essential infrastructure and refusal to supply.

4. IMS Health — C-418/01

Indispensable upstream input and downstream competition.

5. Deutsche Telekom — C-280/08 P

Vertical integration and margin squeeze.

6. Post Danmark — C-209/10

Exclusionary effects and discriminatory/selective pricing.

For a specifically ad-tech-focused answer, add the Google AdSense AT.40411 Commission decision because it directly concerns online advertising intermediation. (Competition Policy)

33. Key Legal Distinction

It is important not to equate:

Fragmentation

with

Monopoly

or:

Vertical integration

with

Illegal conduct.

A company can legitimately operate several layers of a technology supply chain.

The competition-law problem arises where dominance is combined with conduct that satisfies the requirements of Article 102 TFEU, or where agreements fall within Article 101 TFEU, subject to applicable exemptions and effects analysis.

34. Future Ad-Tech Risks

Future litigation may involve:

AI-generated advertising;

autonomous ad-buying agents;

algorithmic auctions;

synthetic audiences;

privacy-preserving advertising;

browser-based identity systems;

retail-media networks;

connected-TV advertising;

augmented-reality advertising;

biometric advertising;

cross-device identity;

AI-based attribution;

autonomous campaign optimisation.

These technologies could make the supply chain even more fragmented while simultaneously concentrating decision-making in a small number of algorithms.

35. Simple Exam Formula

Ad-Tech Hidden Monopoly =

Fragmented Supply Chain + Vertical Integration + Network Effects + Data Advantage + Switching Costs + Interoperability Dependence + Multi-Homing Restrictions + Self-Preferencing + Exclusive Contracts + Auction Control + Algorithmic Advantage + Dominance + Article 101/102 TFEU + DMA + Foreclosure + Consumer/Business Harm

36. Conclusion

Ad-tech supply-chain fragmentation creates a distinctive European competition-law problem because apparent market fragmentation does not necessarily mean that economic power is fragmented.

A firm can potentially obtain strategic power through control of several connected layers:

Data → Identity → DSP → Exchange → SSP → Publisher Ad Server → Measurement

The most important legal questions are therefore:

Who controls each layer?

Which layers are economically dependent upon each other?

Can competitors switch?

Is access to a particular input indispensable?

Does the same undertaking operate competing sides of the transaction?

Is proprietary data being used to reinforce dominance?

Is the undertaking favouring its own services?

Are contractual restrictions excluding rivals?

Does the conduct produce actual or potential foreclosure?

The modern Google Shopping judgment provides an important framework for analysing self-preferencing and leveraging, while Meta demonstrates the interaction between data practices and competition law. Bronner and IMS Health provide the principal access/indispensability framework, and Deutsche Telekom addresses vertical pricing strategies. (curia)

The European Commission's direct Google AdSense and later Google ad-tech proceedings are especially important because they demonstrate that competition authorities can analyse the advertising ecosystem across distinct technological layers rather than treating "digital advertising" as a single undifferentiated market. (Competition Policy)

One-line revision:

Ad-Tech Hidden Monopoly = control or influence over multiple fragmented advertising layers + data/network effects + dependency and switching barriers + potentially exclusionary conduct = a possible Article 101/102 TFEU and DMA competition problem, subject to proof of the relevant market, dominance, conduct and competitive effects.