4 min read.Updated: 07 Jun 2021, 07:19 PM ISTSAM SCHECHNER, The Wall Street Journal
Deal with competition authority resolves complaint over the firm’s digital advertising tactics
Alphabet Inc.’s Google agreed to pay French regulators a fine of nearly $270 million, settling one of the first antitrust cases globally that allege the tech company abused its leading role in the digital advertising sector.
France’s competition authority said it had also accepted a series of proposed commitments Google made to settle the case, including promises to make it easier for competitors to use its online-ad tools. The Wall Street Journal first reported the proposed settlement last month.
Google’s commitments will be binding for three years, the authority said.
“We have agreed on a set of commitments to make it easier for publishers to make use of data and use our tools with other ad technologies," said Maria Gomri, Google’s legal director in France in a blog post. “We’re committed to working collaboratively with regulators and investing in new products and technologies that give publishers more choice and better results when using our platforms," she said.
While Google’s commitments are only binding in France, they will become a template for how the company could resolve similar complaints from publishers and advertising-technology rivals elsewhere—leading to changes in how Google operates its system around the world. Ms. Gomri said Google will be testing its changes “over the coming months before rolling them out more broadly, including some globally."
As part of the case, the French competition authority alleged that the company’s advertising server—historically known as DoubleClick for Publishers and used by most large online publishers to put ad space up for sale—gave Google’s online ad auction house, AdX, an advantage in advertising auctions, in part by providing information about rival bids.
The authority also alleged other forms of self-preferencing between Google’s advertising-technology tools, including AdX’s offering better interoperability options to DoubleClick for Publishers.
“These practices were particularly serious because of their powerful impact on online advertising intermediaries," said Isabelle de Silva, the head of the French competition authority, in a press conference Monday.
The regulator said Google has made five general commitments as part of the settlement. They include no longer allowing AdX to use competitors’ bids to optimize its own bids, and giving rival ad servers equal access to data about advertising auctions, the regulator said. An independent observer will be responsible for monitoring Google’s compliance and will report back to French regulators.
The settlement is part of a broader wave of antitrust enforcement against big technology companies on both sides of the Atlantic. Last week, the European Union and the U.K. each said they were opening formal antitrust investigations into Facebook Inc.’s classified-ads feature, dubbed Marketplace. The EU has also filed antitrust charges against Apple Inc. and Amazon.com Inc. The companies deny wrongdoing and dispute the charges.
Google’s business of brokering the sale of ads, part of a business that accounted for 13% of Alphabet’s $182.53 billion in revenue last year, is one of the most recent and complex sources of interest for regulators. But it has also long been a source of competition concerns from rivals.
Publishers and ad-tech rivals have complained for years about Google’s ownership of some of the most widely used tools for buying, selling and auctioning ads. They have also complained about Google owning and operating its own ad-supported products, such as Google Search and YouTube—saying they create a conflict of interest that harms competition in online advertising.
Last year, a group of U.S. states led by Texas sued Google in December for allegedly operating a digital-advertising monopoly. The U.K. competition authority began an investigation in January into whether Google’s plan to remove user-tracking tools called cookies from its Chrome browser could hurt competition in the online ad industry. The European Commission, the EU’s top antitrust regulator, has also been investigating Google’s advertising business.
The French case stems from a complaint brought to the authority in 2019 by a group of news publishers led by News Corp, the parent company of the Journal. News Corp, which has historically been a vocal critic of Google’s role in the advertising-technology industry, has since made a pact with it to be paid for its content, but remains the lead complainant in the case.
The French competition authority has been investigating potential anticompetitive behavior in the online advertising business for several years, publishing a report on the topic in 2018.
The French authority spent about a year investigating the case brought by News Corp, and last fall presented antitrust charges laying out Google’s allegedly infringing behavior, the authority said. Google then offered to settle the claim, the authority said. The company discussed remedies with the authority, and a hearing on the proposed settlement was held in May, the authority said.
Ms. de Silva said the fine—less than 2% of Google’s 2020 profit—was calculated based on the amount of revenue for companies in the ad tech sector that were impacted by Google’s practices.
This story has been published from a wire agency feed without modifications to the text.