France to search Google and Facebook as part of online advertising inquiry

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France Google Facebook Competition Authority


24 May 2016 – Yesterday France’s Competition Authority today launched a sector inquiry into the country’s online advertising market, which will probe for potential competition concerns arising from data exploitation, weeks after the enforcer and Germany’s Bundeskartellamt published a joint study on big data.

Bruno Lasserre, president of the French enforcer, said the authority is searching for a clearer picture of the

“ecosystem which forms the online advertising market, and will look at how to define markets, such as advertising in social networks. Today there are a lot of new, innovative intermediaries active on the supply and demand sides of online advertising, such as data brokers and data analytics firms. One relevant issue is whether these independent intermediaries, present at only one stage of the advertising supply chain, can compete effectively with integrated actors such as Google and Facebook.”

While Google and Facebook are important actors and therefore cannot be ignored, the market study is much broader in scope and is not directly targeted at these two companies, he said. The authority said it intends to publish the inquiry’s results next year, and in the interim will consult with sector stakeholders such as advertisers, editors, intermediaries in the advertising production chain and companies specializing in data utilization. Lasserre said that although the authority has the power to compel companies in France and elsewhere to provide information, “we hope to gather information on a cooperative basis”.

Online advertising is a high-growth sector, the authority noted, with 40 per cent of the money spent on it in France going through buying models such as real-time bidding to have one’s ads appear in the web page viewed by an online consumer. Pointing to the increasing number of intermediaries involved in the process, the authority said it intends to clarify the relevant markets surrounding online advertising. Real-time bidding and similar ad-buying models, which have been used by Google for 10 years in advertising-related search, are developing strongly in other forms of advertising, the authority said.

The sector inquiry comes on the heels of a joint report by the French enforcer and Germany’s Bundeskartellamt, which stressed the need for a case-by-case analysis when examining the interplay between big data and competition law in merger control and antitrust enforcement.

At the time, the French enforcer noted it preferred the route of a full-sector inquiry, as compared to the strategy of its German counterpart. In March, the Bundeskartellamt launched an abuse of dominance investigation into Facebook over allegations that the social media company was violating competition laws by requiring users to give up personal data.

While the French and German enforcers’ joint report was very broad in scope and encompassed all possible competition issues arising from the possession and use of data, the French authority appears to have opted for a more refined approach with its focus on online advertising. This can be explained by the fact that online advertising is the market with the largest stakes, considering its size and its double-digit annual growth.

In December 2010, the French enforcer released the results of its first sector inquiry into the online advertising market, where it concluded that Google held a dominant position in the “advertising market linked to search engines”.

The new inquiry is a sign that the authority has changed its views since the earlier probe where it had considered that targeted measures were sufficient to address the competitive stakes of market power in the data sector, without the need to implement sector-wide solutions.

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