France fines Google 220 million euros over online ad dominance

France’s competition regulator on Monday fined Google 220 million euros ($267 million) after finding it had abused its dominant market position for placing online ads, as US tech giants face growing pressure in Europe.

The penalty is part of a settlement reached after three media groups — News Corp, French daily Le Figaro and Belgium’s Groupe Rossel — accused Google of effectively having a monopoly over ad sales for their websites and apps.

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The competition authority determined that Google gave preferential treatment to its own ad inventory auction service AdX and to Doubleclick Ad Exchange, its real-time platform for letting clients choose and buy ads.

“It is the first ruling in the world to scrutinise the complex algorithmic processes for the auctions that determine online ‘display’ advertising,” the authority’s president Isabelle de Silva said.

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Media groups looking to sell ad space on their internet sites or mobile apps using rival platforms often found that Google’s services were unfairly competing against rivals, using a variety of methods.

For example, regulators found that Doubleclick would vary the commission it took when making a sale based on prices offered by other so-called ad servers.

At the same time, Google arranged for AdX, its own supply-side platform (SSP), to give preferential treatment to offers emanating from Doubleclick — effectively squeezing out competitors such as Xandr or Index Exchange.

“The practices are particularly serious because they are penalising Google’s competitors in the SSP market as well as the editors of websites and mobile apps,” the regulator said in a statement.

Media groups saw their online ad revenues crimped “even as their business model has been strongly undermined by the decline in paper subscriptions and the associated drop in advertising revenue,” it said.

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Le Figaro eventually dropped its complaint.

Google did not contest the findings, and the regulator said the company has committed to operational changes including improved interoperability with third-party ad placement providers.

“We are going to test and develop these changes in the coming months before deploying them more broadly, including some on a global scale,” Maria Gomri, legal director at Google France, said in a statement.

The fine represents just a tiny fraction of the $55.3 billion in revenue booked by Google in the first quarter of this year alone, mainly from online ad sales.

The ruling comes as American technology firms are drawing closer scrutiny from European authorities, which are giving themselves new resources to better understand the complex workings of fast-evolving markets.

Last week, Germany’s competition regulator said it was expanding an antitrust investigation into Google and its parent company Alphabet to include Google News Showcase, a service aimed at increasing revenue for media publishers.

Facebook also found itself targeted last week by parallel competition enquiries from the European Union and Britain, into whether the social media giant uses data from advertisers to unfairly dominate the online classifieds market.

Google had already been fined 150 million euros by the French regulator in December 2019 over “opaque” operating rules for its advertising platform, which were deemed to be applied in “an unfair and random manner.”

And in December last year, Google as well as Amazon were fined a total of 135 million euros by France’s privacy watchdog for placing advertising cookies on users’ computers without consent.