Google (NASDAQ: GOOG) has reached a €220 million settlement with France's top trustbuster, ending a three year long probe by the Authority into the way that Google runs its ad business.
Google was fined for "abusing its dominant position," said the French Competition Authority (FCA) in a statement. The body alleges that Google used its considerable market share to effectively pressure publishers into using Google's ad services in an anti-competitive manner.
Isabelle de Silva, president of the Authority, claimed that the probe was the first ever such probe into "the complex algorithmic auction processes by which online advertising 'display' operates."
"Google took advantage of its vertical integration to skew the process," de Silva added while going on to describe Google's manner of conduct as being "particularly serious."
In 2018, the FCA launched a broad inquiry into the online advertising sector, The results of which shone a blaring spotlight on Google's outsized presence in France's ad tech industry. A formal complaint then followed the inquiry, filed by News Corp on behalf of its French newspaper, Le Figaro. News Corp dropped out of the complaint in November, but the FCA's probe continued.
According to de Silva, the investigation revealed how Google managed to favor itself over its competitors by providing both an ad server (DoubleClick for Publishers) and a supply-side platform (SSP). Both of which are pieces of software that publishers use to automatically manage, deploy and sell ad spaces on their digital platforms.
Through its DoubleClick ad server, the Authority alleged that Google managed to fed privileged information, such as the winning bids, to buyers on its AdX platform. The Authority also noted a distinct lack of interoperability between Google's tech and its competitors while noting the distinct level of synergy between DoubleClick and AdX.
According to the Authority, the net effect of all this was that publishers were deprived of a fair and competitive bidding process for their limited ad space.
"The practices put in place by Google to favor its own advertising technologies have affected press groups, whose business model is heavily dependent on ad revenues. These are serious practices and they have been rightly sanctioned," said French Finance Minister Bruno Le Maire.
Google plead no contest to the charges levied on it and has agreed to a series of changes to make it easier for buyers on competing platforms to use Google's online tools. Google has also pledged to no longer allow buyers on AdX to use competing bids to optimize their own while also giving competing ad servers access to auction data from Google's platforms in real-time.
The goal is to minimize the advantages baked into Google's vertically integrated business model and diminish its market share. The Authority's ruling also opens up Google to lawsuits from French publishers who may have experienced a material loss as a result of Google's business practices.
"For years, there was a fear of taking on these platforms because they were too powerful," said De Silva, adding that she expects that publishers won't hesitate to seek damages following the Authority's decision.