How French competition regulators tamed Google
On June 7, Isabelle de Silva, a little-known French regulator, made the headlines of the world press. After a careful investigation, which de Silva describes as the most complex in which she has been involved, the French Competition Agency, or FCA, fined Google € 220m (£ 187m) . Google, de Silva said, was using its already dominant advertising technology to further strengthen its position and outbid its rivals.
But de Silva was not finished. A month later, in another case, she fined Google again. This time, Google had not negotiated the copyright changes to its search results with the media. Google’s punishment? A fine of 500 million euros.
Such sums are small fry for Google and its parent company Alphabet, which made $ 61.9 billion (£ 44 billion) in the last quarter alone. But the FCA’s decision on Google’s ad technology grabbed the headlines for another reason: Google didn’t fight it. The company agreed with all the facts in the FCA case and also agreed to make some significant changes to the way it operates. And these changes will not only happen in France, but all over the world.
In a single judgment, the regulator, known as Competition Authority in French, has succeeded in reshaping the functioning of Google’s advertising technology. The FCA’s decision revolves around the technologies within Google’s Ad Manager, a platform that helps businesses buy and sell the ads displayed on billions of web pages. The FCA has particularly criticized two elements of the Ad Manager system: the DoubleClick For Publishers ad server and a sales platform known as SSP AdX. The former allows website owners to sell the ads around the content they publish, while the latter is involved in controlling the complex auction process in a fraction of a second.
“Google made sure that the ad server favored the ad space selling platform,” said de Silva. In addition, she explains, Google was using its knowledge of what was happening on other advertising platforms to its advantage by lowering its own prices. “We were able to show in detail that not only did Google have information that others did not have, because of its specificity [dominant] position, but that they actually used that information to have a better chance of winning the auction, ”said de Silva.
In short, Google has used its power to give itself an advantage. Under competition laws in Europe, companies that occupy a dominant position in the market are not allowed to abuse their position. Tech giants are allowed to be big, but they shouldn’t use this power to get stronger at the expense of their rivals. Publishers of websites selling their ad space lost because of Google’s behavior, the FCA ruled. And Google’s competitors in advertising technology have also suffered from Google’s actions.
Unlike three European Commission competition investigations, which fined Google more than € 8.2 billion, the company is not challenging the FCA decision in court. In fact, Google did not dispute the FCA’s findings and proposed changes to its ad technology itself. (He made some changes to the three European Commission cases, but is also legally challenging them.)
“This is the first decision in which the tech giants, and Google in particular, are taking such remedies to settle a case,” said Fayrouze Masmi-Dazi, partner in competition law at French law firm Frieh Associés , who was not involved in the case. Google case. “It’s a very important decision. I think this shows that the French Competition Authority is both a very pragmatic and also creative authority in terms of the solutions that can be found to address the problems identified.
“The decision is completely transparent,” explains Antoine Riquier, commercial litigation lawyer at the Hausfeld law firm. The FCA’s 101-page decision is littered with diagrams explaining how auctions and ad technology servers work. “You have a lot of details, but it’s not too technical at the same time. There is a lot of work on the part of the French Competition Authority on this.