The EU Commission considers that Google breached EU antitrust rules, distorting competition in the advertising technology (adtech), by favouring its own online display ad tech services to the detriment of competing providers of adtech services, advertisers and online publishers.
Image by pikisuperstar on Freepik
How did Google gain its dominant position in adtech?
According to the Commission’s analysis, the company earns main revenue from (i) selling ad space on its own websites and apps, (ii) intermediating between advertisers that want to place their ads online and publishers (i.e. third-party websites, apps) that can supply such space. Advertisers and publishers heavily rely on adtech digital tools for displaying ads, e.g. banner ads in newspapers websites. For example, (i) publishers use their ad servers to manage the ad space on their websites and apps. Also, (ii) advertisers use ad buying tools to manage their automated ad campaigns. And, ad exchanges where publishers and advertisers meet in real time, typically via auctions, to buy and sell display ads. In respect of intermediate services, Google operates (i) 2 ad-buying tools, “Google Ads”, “DV 360”, (ii) a publisher ad server “DoubleClick For Publishers” (DFP), (iii) an ad exchange “AdX”.
(image from https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3207)
What did Google do so that the Commission suspected its abuse of dominant position?
The EC finds that Google is dominant in the European Economic Area-wide markets (i) for publisher ad servers with its service “DFP”; and (ii) for programmatic ad buying tools for the open web with its services “Google Ads” and “DV360”. The Commission considers that the company abused its market power.
- Google favours its own ad exchange AdX in the ad selection auction run by its dominant publisher ad server DFP. For instance, it informs AdX in advance of the value of the best bid from competitors which it had to beat to win the auction.
- Furthermore, it also favours its ad exchange AdX when its ad buying tools Google Ads and DV360 place bids on ad exchanges. For example, Google Ads was avoiding competing ad exchanges and mainly placing bids on AdX, thus making it the most attractive ad exchange.
(image from https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3207)
Allegations and Statement of Objections
It is alleged that Google might have intended to give AdX a competitive advantage and have precluded rival ad exchanges. This would have allowed the company to reinforce AdX’s central role in the ad tech supply chain and its ability to charge a high fee for the said service. These conducts might have infringed Art. 102 the Treaty on the Functioning of the EU (TFEU), prohibiting the abuse of a dominant market position. As a result, sending this Statement of Objections is a formal modality in the Commission’s investigation into the company’s alleged violation of EU antitrust regulations, including Art. 101, 102 TFEU.
Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3207
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