France’s Competition Authority (Autorité de la Concurrence) has fined Google €220 million for “having abused its dominance of the ad-server market with respect to publishers of websites and mobile applications.” The authority calls this “the world’s first ruling on the complex algorithmic auction processes by which online ‘display’ advertising functions.”
To put things in perspective, however, the fine amounts to about:
- 0.18 percent of 2020 revenues for Google ads ($146,924m), YouTube excluded
- 0.16 percent of 2020 revenues for all Google Services ($168,635m)
- 6.7 percent of 2020 net income ($40,269m) for Google’s parent company, Alphabet
The authority was ruling on complaints lodged with the authority by the media companies News Corp, Rossel La Voix and Le Figaro (the last of which withdrew its complaint in November). It found, in particular, that Google was favoring its proprietary DFP ad servers, under the Google Ad Manager brand, and its ad marketplace, SSP AdX (which auctions off “impressions”), thereby penalizing both its competitors on the SSP market and its media-publishing customers. The authority notes that such practices have undermined the business models of the publishers in particular, driving down subscriptions and ad revenues alike.
Rather than contest the finding, Google has invoked the “transaction procedure,” pledging to improve Google Ad Manager’s interoperability with third-party ad servers and marketplaces and to eliminate favorable treatment of its own services. The ruling makes Google’s proposed changes mandatory.
Google has just announced that it will be “testing and developing these changes over the coming months before rolling them out more broadly, including some globally.”
Google has pledged “not to use data from other SSPs to optimize bids in our exchange in a way that other SSPs can’t reproduce,” “not to share any bid from any Ad Manager auction participants with any other auction participant prior to completion of the auction,” and to provide publishers with “at least three months’ notice for major changes.”
Another concern is data sharing. Google is developing a way to ensure “that all buyers that a publisher works with, including those who participate in Header Bidding [a way to run auctions on multiple ad exchanges], can receive equal access to data related to outcomes from the Ad Manager auction. In particular, we will be providing information around the ‘minimum bid to win’ from previous auctions.”
It is modifying Google Ad Manager to enable customers to “set custom pricing rules for ads that are in sensitive categories and implementing product changes that improve interoperability between Ad Manager and third-party ad servers.”
