In early June, the French competition authority, Autorité de la concurrence, announced that Google had reached an agreement with the authority to settle an antitrust investigation regarding the tech giant’s anticompetitive behavior in the market for online advertising services. In addition to a €220 million fine, the settlement includes commitments by Google to change the way their platforms operate to allow for a more competitive industry. While the practical effects of the changes Google has committed to making remain to be seen, the settlement is yet another important step forward in addressing Google’s anticompetitive practices internationally and in rebalancing the online marketplace to create a more even playing field for news publishers.
Following complaints filed by multiple news publishers in 2019, the investigation centered around two of Google’s main advertising services: Doubleclick for Publishers (DFP) and Doubleclick Ad Exchange (AdX). The French competition authority found that Google abused its dominant market position by engaging in practices in the operation of these two services that harmed publishers and made it more difficult for other advertising platforms to compete with Google. In particular, the investigation showed that when private entities tried to buy and sell online advertising space, the DFP publisher ad server favored Google’s own AdX while, conversely, AdX favored the DFP ad server.
In both instances, the investigation found that Google had applied less favorable terms and technical conditions to third-party platforms than to its own services. As an example of this self-preferencing, Google used the prices on competing supply side platforms (SSPs) to inform AdX, allowing it to better optimize AdX, among other benefits, and providing Google’s platforms a competitive leverage at the expense of a competitive marketplace. Google also imposed contractual limitations on third-party platforms to further push buyers and sellers to stay within the Google DFP and AdX ecosystems by making interoperability between Google and third-party platforms more difficult and less efficient. By making it harder and more expensive to use third-party SSPs, Google has been able to steer more and more business to their platforms and away from competitors, making it harder for publishers to use other platforms.
In addition to the fine, Google agreed to change their practices to increase interoperability with third-party platforms and to not restrict the ability of publishers using Ad Manager to negotiate prices and terms directly with third-party platforms, hopefully increasing the ease and ability of publishers and marketers to utilize third-party ad platforms that compete with Google. These changes may lead to a more balanced and healthy competition in the online display ad marketplace and limit Google’s market dominance in the field. Google also committed to no longer using other platforms’ pricing information to optimize their services and to give Ad Manager users at least three months’ notice of any changes that publishers need to adopt. The fees associated with using third-party ad platforms will also be removed according to the agreement, and Google has promised to publish a guide on how to configure AdX Direct Configuration for customers using a third-party platform.
The French settlement comes at a time when Google is facing increased antitrust scrutiny focused on its ad tech services globally, including in the United States, Australia, the United Kingdom, and the European Union. These cases similarly focus on the ways that Google’s advertising technology platforms have restricted competition in the digital ad sector. The commitments made by Google in the French case give reason to hope for a more competitive digital marketplace in France, in addition to potentially serving as a blueprint for regulators in other parts of the world.
Recently, in the United Kingdom, the Competition and Markets Authority (CMA) released proposed commitments made by Google with regards to their Privacy Sandbox initiative following the CMA’s investigation into the issue. The Privacy Sandbox is aimed at developing alternative tools for interest-based digital advertising once third-party cookies are phased out. The CMA’s investigation into the Privacy Sandbox before the tools are finalized is an encouraging development, hopefully addressing problematic issues and features before they arise. For publishers, the increased focus by national competition authorities on Google’s digital advertising practices is long overdue and will hopefully help create an online marketplace that works better for everyone and not just the few dominant platforms.
Adam Wadsworth is a 2nd year student at the University of Miami studying Political Science. He is a legal and digital strategy intern with News Media Alliance for Summer 2021.