Google Changes Ad System to Settle with French Regulators

Google and the French Competition Authority reached an agreement whereby the American tech giant will pay a $268 million (220 € million) fine and change some “unfair” online advertising practices. French finance minister Bruno Le Maire noted the country’s success in “apply[ing] our competition rules to the digital giants who operate in our country.” Google will also stop giving its services preferential treatment and make its advertising system easier to work with other services. Google parent company Alphabet made $41 billion last year.

The New York Times reports that, “Google’s position has long been a source of concern among competitors and news publishers, who say it gives the company unfair insights into advertising prices, inventory and data that others cannot match.”

French publisher Groupe Rossel La Voix and News Corp, publisher of The Wall Street Journal, were two companies that complained to French regulators about Google. In turn, those regulators “focused on the links between Google’s marketplace for auctioning ads, AdX, and another service, Ad Manager, which publishers use to sell space on websites for advertising” and found that, “Google shared pricing information collected from Ad Manager to give an advantage to its auction product.”

French Competition Authority president Isabelle de Silva noted that, “these very serious practices penalized competition in the emerging online advertising market and have enabled Google not only to preserve but also to increase its dominant position.” Google did not admit to wrongdoing, although it did agree “to make more data available to rivals and make it easier for them to use its online advertising services.”

An independent monitor, paid by Google, will ensure that the company “abides by the terms of the settlement,” which is mandatory for three years in France. Google France legal director Maria Gomri stated the company is “committed to working proactively with regulators everywhere to make improvements to our products.”

Reuters reports de Silva added that, “the decision to sanction Google is of particular significance because it’s the first decision in the world focusing on the complex algorithmic auction processes on which the online ad business relies.”

At ad tech company Smart, chief executive Arnaud Créput said that, “this decision is a key milestone to re-energize competition and innovation in the ad tech space, and publishers, who are the primary victims of Google practices, will ultimately benefit from it, but the battle is only beginning.”

Among the as-of-yet unaddressed issues are “Google’s control of its dominant search and YouTube properties to thwart competition” as well as “user privacy curbs Google is to introduce on the web that could benefit it at the expense of competitors.” Most of Google’s sales are search and YouTube ads.

Related:
Google Bows to EU, Rivals with Android Choice-Screen Tweaks, Bloomberg, 6/8/21