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June 8, 2021

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France fines Google US$267m over ads

France’s competition regulator fined Google 220 million euros (US$267 million) yesterday after finding it had favored its own services for placing online ads at the expense of rivals, as United States tech giants face growing pressure in Europe.

The penalty is part of a settlement reached after three media groups — News Corp, French daily Le Figaro and Belgium’s Groupe Rossel — accused Google in 2019 of abusing a dominant market position over ad sales for their websites and apps.

The competition authority determined that Google gave preferential treatment to its own ad inventory auction service AdX and to Doubleclick Ad Exchange, its real-time platform for letting clients choose and buy ads.

“It is the first decision in the world to look into complex algorithmic auctions processes through which online display advertising works,” the authority’s president Isabelle de Silva said.

Media groups looking to sell ad space on their internet sites or mobile apps using rival platforms often found that Google’s services were unfairly competing against rivals, using a variety of methods.

For example, regulators found that Doubleclick would vary the commission it took when making a sale based on prices offered by other so-called ad servers.

At the same time, Google arranged for AdX, its own supply-side platform, to give preferential treatment to offers emanating from Doubleclick — effectively squeezing out rivals such as Xandr or Index Exchange.

“These very serious practices penalized competition in the emerging online advertising market, and allowed Google not only to maintain but also to increase its dominant position,” De Silva said.

Media groups saw their online ad revenues crimped “even though their economic model is also strongly weakened by the decline in sales of print subscriptions and the decline in associated advertising revenue” in the shift to online news, it said.

Le Figaro eventually dropped its complaint last November, but News Corp, owner of The Wall Street Journal, and Rossel pressed ahead.

Google did not contest the findings, and the regulator said the company has committed to operational changes, including improved interoperability with third-party ad placement providers.

“As part of these commitments, we are reaffirming our promise not to use data from other SSPs to optimize bids in our exchange in a way that other SSPs can’t reproduce,” Maria Gomri, legal director at Google France, said in a statement.

The fine represents just a tiny fraction of the US$55.3 billion in revenue booked by Google in the first quarter of this year alone, mainly from online ad sales.


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