In a ruling dated May 4, 2023[1], the French Competition Authority (the “FCA”) ordered interim measures against Meta following a complaint by Adloox, in light of suspicions that Meta was abusing its dominant position on the market for online advertising by imposing unfair conditions for accessing its ecosystem, thereby causing serious and immediate harm to both Adloox and other independent ad verification service providers.  These interim measures are imposed pending a decision on the merits of the case.  

Background

Meta, which is the parent company of Facebook and Instagram, notably provides advertising services among many other activities.  In particular, Meta offers ad verification services intended to measure the effectiveness and to control the appropriate deployment of ads campaigns.  This type of services may be offered by integrated advertising platforms (such as Meta) for their own advertising inventories, or by independent players like Adloox, the latter needing access to the integrated platforms’ ecosystems to cover the related inventories.  

Meta has developed two partnerships aimed at granting such access, by processing and providing data to third party ad verification players enabling them to offer ad verification services on Meta’s advertising inventories. The “viewability” partnership allows partners to ensure that an ad has actually been seen by internet users, and the “brand safety” partnership allows them to control the appropriate deployment of ads campaigns and guarantee that the advertisement is not displayed in an environment that could harm the interests and values of the brand.  Access to these partnerships is subject to a prior “invitation” by Meta.

On October 9, 2022, Adloox, a French provider of ad verification services, filed a complaint with the FCA stating that Meta was abusing its dominant position in the market for display advertising in France. Adloox first claimed that Meta was abusing its dominant position by discriminatorily denying it access to the “viewability” and “brand safety” partnerships. Adloox also claimed that Meta was abusing its dominant position by refusing to give direct access to the data required for providing advertising verification services to third party service providers (indeed, Meta is only providing third party providers with data it collected and processed itself beforehand).

In January 2023, Meta provided the FCA with a proposal of new “eligibility criteria” for the “viewability” and “brand safety” partnerships to address potential competitive concerns raised by the existing criteria.

The FCA’s preliminary ruling on the alleged abuse of dominant position

The FCA preliminarily ruled that Meta might have abused its dominant position on the market for online advertising on social media as well on the broader market for online advertising not related to searches in France by applying unfair and discriminatory conditions to access its advertising ecosystem.  

In particular, the FCA preliminarily found that Meta had likely not defined transparent, objective, non-discriminatory, and proportionate criteria for accessing and maintaining the viewability and brand safety partnerships, in breach of its “duty” as a dominant market player.  With respect to the new eligibility criteria proposed by Meta in January 2023, the FCA considered that these were not satisfactory as Meta did not intend to make them public and eligibility to the partnerships was still subject to a prior “invitation” by Meta.  In addition, the FCA also found that Adloox’s denial of access to these partnerships was susceptible to be discriminatory, given that Adloox’ situation is equivalent to that of certain of its competitors who have been invited and promoted as Meta partners. 

The interim measures

In light of the above, the FCA imposed interim measures on Meta on the basis of Article L.464-1 of the French Commercial Code, according to which the FCA might impose interim measures where “the conduct causes serious and immediate harm to the general economy, to that of the sector concerned, to the interests of consumers or, as the case may be, to the complainant company”, provided that such interim measures remain strictly limited to what is necessary to deal with the urgency pending a decision on the merits.

The FCA found that Meta’s alleged practices are causing serious and immediate harm to the interests of Adloox because the latter is deprived of a major source of growth, which could result in the loss of its current clients or even in it being evicted from the ad verification sector.  The FCA found that Adloox is already facing “financial difficulties” because it has no access to the Meta ecosystem, unlike some of its competitors.  In addition, the FCA found that these practices also cause serious and immediate harm to the independent ad verification sector in general, given Meta’s strong position in the market for online advertising on social media, such practices leading to foreclosures on the market for the benefit of market participants who already have access to the Meta ecosystem.

The FCA therefore ordered Meta to publicly define new objective, transparent, non-discriminatory and proportionate criteria for accessing its viewability and brand safety partnerships within two months.  In addition, provided that Adloox meets these new access criteria, the FCA ordered that Meta allows Adloox to access its ecosystem in an accelerated manner.

Takeaways

The FCA’s ruling shows, once again, the strong focus of national competition authorities (“NCA”) on big tech players.  More specifically, the online advertising sector is under strict scrutiny by the NCAs.  For an example, since 2018, the FCA has conducted several investigations in connection with this sector against companies such as Google, Apple, and Meta.

A decision on the merits will be issued within the coming months.  Meta chose not to challenge the interim measure decision before the Paris Court of Appeals.

[1]           FCA, May 4, 2023, decision n°23-MC-01 regarding a request for interim measures from Adloox (the “Decision”).