France fines Google for $267 million over Ad dominance

American technology firms are drawing closer scrutiny from European authorities. - Copyright MYANMAR MINISTRY OF INFORMATION/AFP/File Handout

As US tech companies face mounting pressure in Europe, France's competition regulator penalized Google 220 million euros ($267 million) on Monday for favoring its own services for displaying online adverts at the expense of competitors.

The fine is part of a settlement struck after three media companies — News Corp, Le Figaro in France, and Groupe Rossel in Belgium — accused Google of abusing its dominating market position in ad sales for their websites and apps in 2019.

Google offered preferential treatment to its own ad inventory marketplace AdX and the Doubleclick Ad Exchange, its real-time platform for letting clients choose and sell advertising, according to the competition authorities.

The authority's head, Isabelle de Silva, said, "It is the first decision in the world to look into complicated algorithmic auctions procedures through which online display advertising operates."

Media firms who want to sell ad space on their websites or mobile applications frequently use many organizations at the same time, which are referred to as supply-side platforms (SSP).

Regulators, on the other hand, found that Google's services were unfairly competing against rivals in a variety of ways, or that they were blocking proper interoperability with alternative ad marketplaces.

When brokering a sale, Doubleclick, for example, would adjust the commission it charged dependent on the prices supplied by other so-called ad servers.

At the same time, Google arranged for AdX to give Doubleclick offers preferential status, effectively squeezing out competitors like Xandr and Index Exchange.

“These egregious actions harmed competition in the nascent online advertising sector, allowing Google to not only maintain but even strengthen its monopoly,” De Silva added.

'It's the first of its kind in the world.'

The transition to online news hurt media companies' ad income, it claimed, "even though their economic model is also substantially weakened by the drop in sales of print subscriptions and the reduction in associated advertising revenue."

Last November, Le Figaro dropped its case, but News Corp, the owner of The Wall Street Journal, and Rossel persisted.

Thierry Hugot, Rossel's sales, and marketing director told AFP last week, "We need regulation because we are not defending ourselves with the same weapons today."

The results were not contested by Google, and the regulator stated that the business has agreed to make operational adjustments, including enhanced interoperability with third-party ad placement providers.

In a statement, Maria Gomri, legal director at Google France, said, "As part of these promises, we are confirming our guarantee not to utilize data from other SSPs to optimize bids in our exchange in a way that other SSPs cannot imitate."

“Over the coming months, we will be testing and developing these modifications before rolling them out more generally, including some globally,” she added.

‘Follow our rules.'

The decision was praised by French Finance Minister Bruno Le Maire, who organized a new digital tax on Internet firms in 2019 that aggravated ties with the Trump administration.

In a statement, he added, "Large platforms have steadily acquired dominating market positions, and it's critical that we apply our competition regulations to technological giants who operate here."

While talks on a complete overhaul of international fiscal rules continue, France has delayed collection of its digital levy, as public outrage rises over hugely successful multinationals that typically make only modest tax contributions.

The French fine is a drop in the bucket compared to Google's $55.3 billion in income in the first quarter of this year, primarily from online ad sales.

The decision comes as European regulators intensify their monitoring of American technology corporations, allocating extra resources to better comprehend the complicated workings of fast-evolving markets.

Last week, Germany's competition authority announced that an antitrust investigation of Google and its parent firm Alphabet would be expanded to include Google News Showcase, a program intended at improving revenue for media publishers.

Facebook was also the subject of concurrent competition investigation from the European Union and the United Kingdom last week, both looking into whether the social media giant is abusing data from advertisers to gain an unfair advantage in the online classifieds market.

In December 2019, the French regulator punished Google 150 million euros for its advertising platform's "opaque" operational regulations, which were found to be applied in an "unfair and arbitrary" manner.

In December of last year, France's privacy watchdog punished Google and Amazon for a total of 135 million euros for putting advertising cookies on users' computers without their knowledge.

Publish : 2021-06-07 20:43:00

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