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France's competition regulator fined Google US$268 million on June 7, 2021, after finding the company had abused its dominant market position for placing online ads. Photo: Agence France-Presse

Google to overhaul global ad model after France slaps it with US$268 million antitrust fine

  • France’s action against Google is the first in the world to tackle anticompetitive behaviour in online advertising
  • The US tech giant also pledged to remedy the situation by improving the interoperability of its Google Ad Manager services for third parties
Google agreed to pay 220 million euros (US$268 million) and change the way its business works across the world after settling a French investigation that struck at the heart of its power over online advertising.
France’s antitrust agency said on Monday the US tech giant used its dominance over ad sales and purchasing on its platforms to distort the market to its own advantage, hurting publishers such as News Corp.

“Google took advantage of its vertical integration to skew the process,” Isabelle de Silva, who heads France’s Autorité de la concurrence, said at a Paris press conference on Monday. She described Google’s behavior as “particularly serious”.

The decision is a rare look inside the black-box of online advertising, where Google automatically calculates and offers ad space and prices to advertisers and publishers as a user clicks on a web page.

In addition to the fine, the Alphabet subsidiary entered a pledge to remedy the situation by making sure its Google Ad Manager services work more smoothly for third parties.
The French competition body, Autorité de la concurrence, said Google has been unfairly sending business to its advertising server and its online-ad auction house to the detriment of rivals. Photo: Agence France-Presse

The French authority criticised Google for favouring its DoubleClick for Publishers ad server, where publishers sell ad space, and its AdX or DoubleClick Ad Exchange, where publishers sell page impressions to advertisers.

De Silva said that Google intends to apply some of these commitments at a worldwide level.

With separate cases into Google, Apple and Facebook, French antitrust regulators are starting to rein in anticompetitive behaviour in online advertising.

While Google’s case ended with a fine, Facebook last week tried to avoid that by making commitments to placate regulators.

Google said in a blog post it is “committed to working proactively with regulators everywhere to make improvements to our products”. The company also said it will be testing and developing behavioural changes agreed as part of the settlement over the coming months.

Google will make Android apps tell users about data collection

The Google case stems from a complaint lodged in 2019 by Rupert Murdoch’s News Corp, French newspaper Le Figaro and Belgian media group Rossel La Voix.

“For years there was a fear of taking on these platforms because they were too powerful,” de Silva said. She added that she fully expects damages requests to be lodged following the regulator’s decision.

French Finance Minister Bruno Le Maire said it is “essential” tech giants heed the country’s competition rules. He pointed out that Google’s behaviour “impacted” media groups whose “economic model is strongly dependent on advertising revenue”.

The case sprang from a study the French competition authority published in 2018 after conducting a sector inquiry into online advertising, which put the spotlight on the power of Google and Facebook.

Google has already attracted French antitrust scrutiny over online advertising after a 150 million-euro fine in 2019. The search engine operator also risks a penalty in the coming weeks over suspicions it failed to comply with an order relating to its news service.

EU and Britain to toughen rules, fines for US tech giants

The French settlement is the latest in a series of efforts to crack down on Silicon Valley’s market dominance across the continent. Last week, Google’s news service was targeted by a German investigation. The EU and the UK also opened investigations into Facebook over how it uses some information from advertisers.

Ahead of the weekend’s landmark G7 tax agreement, tech firms have also faced intense scrutiny over their tax affairs, amid criticism that they don’t pay their fair share, despite racking up massive sales in the region.