Google fined € 220 million by the French Competition Authority for abusing its dominant position in the online advertising sector – Anti-trust / Competition law


France: Google fined € 220 million by the French Competition Authority for abusing its dominant position in the online advertising sector

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By decision n ° 21-D-11 of June 7, 20211, the Competition Authority(French Competition Authority or “FCA”) imposed a fine of 220 million euros on Google.

At issue: Google had engaged in discriminatory practices aimed at promoting its own advertising technologies to the detriment of other players in the sector.

The case was brought before the Competition Authority by several newspaper publishers (News. Corp. Inc.2, the Figaro group3 and the Rossel La Voix group4).

Which market players and which technologies?

Online advertising works through the combination of the following technologies and market players:

  • Advertisers are companies that want to show their ads and buy advertising space for this purpose.
  • On the other side of the chain are the
    editors, that is to say the sites and applications offering advertising space. These include newspaper publishers who, following the decline of the print media, now derive most of their income from online advertising.
  • To purchase advertising space, advertisers use
    purchasing platforms (called DSP for Demand side platforms) which allow them to access programmatic auction platforms (called SSP for Supply side platforms), which are virtual algorithmic marketplaces where supply (publishers) and demand (advertisers) meet and where prices are set.
  • Advertising servers are the tools that allow publishers to choose and display advertisements on their website or mobile app. These servers allow publishers to choose to deal directly with advertisers or indirectly through supply side platforms.

Although publishers often use multiple supply-side platforms, they typically only access these platforms through a single ad server that performs automated auctions between these platforms.

Discriminatory practices criticized

The newspaper publishers’ complaint concerned two advertising technologies offered by Google:

  • the Doubleclick ad server for publishers (hereinafter “DFP”);
  • the programmatic sales platform for Doubleclick AdExchange advertising space (hereinafter “AdX”).

Indeed, the complainants argued that these two technologies are mutually advantageous, to the detriment of competing technology suppliers, through the following mechanisms:

  • First, the advertising server DFP is said to have organized unfair competition tending to promote its own AdX platform.

As such, DFP has indicated to AdX the price offered by competing platforms, which allows AdX to adapt its prices and, thus, to maximize its chances of winning the auctions.

  • Second, the interoperability between the AdX platform and DFP’s competing ad servers was limited, preventing the latter servers from competing between the AdX platform and competing platforms.

The FCA considered that these were serious anti-competitive practices: they caused significant difficulties for Google’s competing servers and platforms. These practices have also deprived publishers of the possibility of fully exploiting the competition between different platforms on the supply side.

The establishment of a settlement procedure

Google did not contest the objections and requested to benefit from the transaction procedure provided for in article L. 464-2 §3 of the French Commercial Code.

She proposed several commitments to put an end to these practices and the FCA decided to make these commitments binding.

In particular, Google is committed to modifying the existing configurations of its technologies and to allow interoperability with its competitors.

The FCA also fined Google € 220 million.

The FCA President welcomed the decision:

The Google sanctioning decision has special significance because it is the first decision in the world to examine the complex algorithmic auction processes by which online display advertising works. “

The investigation, which was carried out particularly quickly, revealed processes by which Google, relying on its considerable dominance in ad servers for websites and applications, favored itself over its competitors on ad servers. advertising and supply side platforms.

These very serious practices penalized competition in the emerging online advertising market, and enabled Google not only to maintain but also to increase its dominant position. This sanction and these commitments will restore a level playing field for all players, and the ability of publishers to make the most of their advertising space.

Footnotes

1. https://www.autoritedelaconcurrence.fr/fr/decision/relative-des-pratiques-mises-en-oeuvre-dans-le-secteur-de-la-publicite-sur-internet-0

2. The Wall Street Journal, The Sun, The Daily Telegraph, New York Post …

3. Le Figaro, Le Figaro Magazine, Madame Figaro – The Figaro group withdrew from the action in November 2020 nevertheless withdrew in November 2020

4. La Voix du Nord, Courrier Picard, Le Soir

To read in French, please click here.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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