On June 7, 2021, the French Competition Authority (“FCA”) imposed a fine of €220 million on Google Inc. (now Google LLC), Alphabet Inc., and all Alphabet Inc.’s subsidiaries (together, “Google”), for allegedly abusing its dominant position in the market for advertising servers for website and mobile application publishers.[1] This follows from 2019 complaints by press groups News Corp Inc., Le Figaro, and Rossel La Voix.[2] Google decided to settle the case and to offer commitments to improve the functioning of the relevant markets.

The relevant markets

The FCA identified the market for advertising servers for website and mobile applications publishers and the market for supply-side advertising platforms.

Publishers use ad server technologies to market the advertising space on their websites or mobile applications. Ad server technologies allow for ads to be displayed on publishers’ websites and/or mobile applications. They also enable publishers to manage the sale of their advertising space, either by transacting directly with advertisers or through auctions held on multiple platforms via an automated mechanism.

Publishers also use platforms for the programmatic sale of advertising space (“supply-side platforms” or “SSPs”). SSPs are marketplaces where advertisers meet publishers – SSPs solicit a price offer from advertisers for a given advertising space, conduct an auction between the various prices offered by advertisers, and share the winning bid with the advertising server.

Publishers generally use a single ad server to interact with all the auction platforms. In contrast, they tend to simultaneously offer the same advertising space on several auction platforms, so as to optimize their income.

Google offers two advertising technologies: the DoubleClick for Publishers ad server (“DFP”) and the SSP DoubleClick AdExchange (“AdX”), which Google has been marketing under the Google Ad Manager brand since June 2018.

Favoring practices

The FCA concluded that Google abused its dominant position on the advertising server market by implementing two practices aimed at ensuring that DFP and AdX favored each other.

First, the FCA alleged that DFP favored AdX against third-party SSPs. In particular, although Google had already put an end to this practice, the FCA noted that DFP used to inform AdX of the price offered by competing platforms to AdX (whereas other SSPs did not see their rivals’ bids), which then, according to the FCA, used this information to overbid competing SSPs.[3]

Second, the FCA alleged that Google had imposed contractual restrictions on interoperability between third-party ad servers and AdX. As a result, the FCA found that AdX was only partially interoperable with DFP’s rivals and did not allow them to organize a competition between AdX and its competitors.[4]

Effects on competition

The FCA concluded that these practices had anticompetitive effects in the relevant markets, as in its view Google was able to reduce the attractiveness of rival ad servers and SSPs for publishers. Moreover, the FCA found that the practices allowed AdX to maintain high prices.

The FCA also took into account the fact that these practices took place in emerging markets with strong growth and, as such, it considered that they may therefore have affected competitors’ ability to develop. The FCA found that several of Google’s rivals had experienced significant difficulties in France during the relevant period, while Google was able to significantly increase its market share and revenues.[5]

Settlement procedure and commitments

Google decided to settle the case and therefore did not dispute the facts. Google also proposed commitments to improve Google Ad Manager services’ interoperability with third-party ad server and sales platform solutions. The commitments will be binding in France for three years, following the FCA’s decision.

Specifically, Google committed to offering interoperability with its DFP server to third-party SSPs[6] by:

allowing third-party SSPs fair access to information on the auction process;

preserving third-party SSPs’ full contractual freedom so that they can negotiate special conditions with publishers or put buyers in competition with one another;

ensuring that AdX no longer uses its rivals’ price in order to optimize its bids in a way that third-party SSPs cannot replicate;

offering guarantees of technical stability, both for third-party SSPs and for publishers.

Google also committed to allowing publishers using third-party ad servers to access AdX on-demand in “real-time”.[7]

[1]              Decision, para. 431.

[2]              Le Figaro group withdrew its complaint on November 6, 2020.

[3]              Decision, para. 236. Google ceased this conduct ahead of the FCA’s decision.

[4]              Decision, para. 238.

[5]              Decision, para. 457.

[6]              Commitments, paras. 2.3-2.19.

[7]              Commitments, paras. 3.3-3.13.