Google was fined 220 million Euros (268 million US dollars) on Monday, June 7 by France’s Competition Authority (Autorite de la concurrence) for unfair online advertising practices. The head of the administrative authority, Isabelle de Silva, stated that the decision was unprecedented.
The tech giant unfairly favored its own tools to buy and sell online advertisements over those of its rivals. “Google used its vertically integrated business model in display advertising to gain an advantage over other competitors,” de Silva said in a statement. However, by agreeing to make changes to its marketing practices in response to the penalties levied by the authority, Google has set a precedent.
“This is the first investigation in the world that examines the display advertising space where Google is dominant, and the first time Google has agreed to a settlement with engagements. This case will be of interest to other regulators who are looking at the online ad market and technologies,” she said.
The French Competition Authority carries out activities such as business competition regulation, preliminary inquiries or full investigations into mergers, and assessments on the competitive implications of mergers. The council has the final say on whether or not a merger is approved, taking into account the country’s fundamental interests.
“The practices in question are particularly serious because they penalised Google’s competitors in the SSP market and publishers of mobile sites and applications,” according to the statement. Furthermore, a dominant company should demonstrate “responsibility” and not “undermine” competition.
Google did not contest the penalty, and instead decided to settle. The company offered to modify its Ad Manager and SSP AdX sales platform, which facilitates the auction process for publishers to “sell their ‘impressions’ or advertising inventories to advertisers.” By revealing rival pricing information in the Ad Manager, the company gained an unfair advantage over competitors, according to French regulators.
The investigation by the authority was triggered by a complaint from News Corp in 2019. Bruno Le Maire, the French finance minister, backed the decision, saying, “The practices put in place by Google to favor its own advertising technologies have affected press groups, whose business model is heavily dependent on ad revenues. These are serious practices and they have been rightly sanctioned.”
This is not the first time Google has gotten into trouble with European regulatory agencies by breaking advertising guidelines. The company was penalized 1.5 billion Euros (more than 2 billion US dollars) in 2019 by the EU for breaching antitrust rules.
At the time, Google was caught abusing its market position by forcing several restrictive clauses into contracts with third-party websites wishing to use Google’s search bar. The operators of the websites were required to display a disproportionate number of text ads from Google rather than from competitors, which placed companies such as Microsoft and Yahoo at a disadvantage.
“This sanction and these commitments will make it possible to re-establish a level playing field for all players, and the ability for publishers to make the most of their advertising space,” de Silva said.
In a blog post, Maria Gomri, the legal director for Google France, talked about how Google has been collaborating with the French Competition Authority for the past couple of years on issues related to ad technology, “more specifically about Google Ad Manager.”
Gomri said that the commitments Google made during the latest negotiations would “make it easier for publishers to make use of data and use our tools with other ad technologies. We will be testing and developing these changes over the coming months before rolling them out more broadly, including some globally.”