Google fined $268M in France over ad platform practices
Google LLC said today that it has agreed to pay 220 million euros, or about $268 million, to settle an antitrust lawsuit in France over its business practices in the online advertising market.
Google has also agreed to change a number of those business practices.
The lawsuit Google is settling was brought by the French Competition Authority following a two-year investigation. The suit focused on two components of Google’s Ad Manager online advertising platform: AdX and DFP.
AdX is a marketplace where online publications can sell advertising space to brands. The marketplace operates as an auction: Brands place bids for advertising real-estate in publishers’ websites and the bidder with the highest offer wins.
DFP helps publishers coordinate the auction process. Additionally, it provides a feature that allows publishers to submit ad space not only to the AdX marketplace but also to other marketplaces. By promoting ad space across multiple channels at once, publishers can draw more bids from brands and thereby fetch higher prices.
The French Competition Authority accused Google of integrating AdX and DFP in a way that gave it an unfair competitive advantage over rival ad platforms. Publishers often use DFP to list ad space on the AdX marketplace and competing marketplaces at the same time to draw more bids. The lawsuit accused Google of collecting pricing data on winning bids from competing marketplaces to boost AdX.
“DFP indicated, until recently, the price offered by competing platforms to AdX, and that the latter used this information to optimise its bids and maximise its chances to win them against competing SSPs [supply-side platforms],” the French Competition Authority stated in an explainer. The regulator detailed that AdX boosted its chances of winning auctions “by varying its commission according to the competitive pressure emanating from other SSPs.”
Officials also found reason for concern in how AdX, the search giant’s ad marketplace, integrates with products from rival companies. Using Google’s DFP service, publishers can put ad space up for auction across AdX and multiple other marketplaces at the same time. However, until now, third-party services that compete with DFP couldn’t effectively create multimarketplace bidding competitions involving AdX.
“The AdX platform is only partially interoperable with DFP’s competing ad servers, and does not allow the latter to organise a competition between AdX and its competitors,” the French Competition Authority stated.
In addition to paying the $268 million fine, Google has agreed to address the key competitive issues flagged by the suit. First, AdX will no longer use data collected on the price of offers from rival marketplaces “in a way that is not reproducible by third-party SSPs,” or supply-side platforms. Second, Google will make DFP work better with rival ad marketplaces to ease the creation of bidding competitions that include AdX.
Google will appoint an independent trustee to monitor the implementation of the changes.
The changes reportedly mark the first time that the search giant has agreed to update how it runs its ad business in response to an antitrust lawsuit. That’s significant not only because advertising accounts for the bulk of Google’s revenue, but also because DFP and AdX are two of the most widely used services in the marketing technology landscape. As a result, the changes will affect numerous publishers and marketers, not to mention smaller advertising platforms that compete with Google.
Google is not the only tech giant that has faced scrutiny over its ad business. Last week, the European Union and U.K. launched investigations into Facebook Inc.’s classified ads business to determine if the social network may have gained an unfair advantage over rivals. Facebook and Google are the two largest players in the online advertising market by revenue.
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