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France backing German investigation of Facebook, Google ad power

Now it is France’s turn to point a harsh spotlight onto online advertising, with the suggestion that Google and Facebook have significant unfair advantages in the display sector. This has an ugly feel about it, in that in February Germany’s cartel office began a full scale enquiry into the same subject. It turns out that this was based on the same research which was carried out in conjunction with the French the competition authority “Autorité de la concurrence.” Now both of them are ready to take things a step further.

As we said in that story in February, it seems that Google and Facebook have unnatural advantages which local suppliers of advertising cannot hope to catch up, mostly data acquired from search and social media entries.

Germany has now moved to the next level of a full enquiry and France is likely to go the same route. Both have been working in defining this market for over a year.

The Autorité de la concurrence has basically made its findings public this week after a broad consultation of all advertising market stakeholders conducted through hearings, targeted questionnaires, online consultation whereby it gained an understanding of the online advertising sector.

The advertising in question is display Advertising – tiles, banners, and skins integrated into site contents on websites and the report makes it clear that this is not search advertising.

The report says that internet advertising has already become the leading form of advertising in France, estimated at €3.5 to €4.2 billion in 2016; with high growth and supported by the widespread use of programmatic technologies which use data to segment audiences. It then goes on to describe programmatic technology with demand side and sell side platforms and real time auctions and points out that apart from those two companies, no-one else has managed to raise their market share in this sector and it identifies stakeholders who tell the authority that their behavior is anti-competitive and raises concerns over the use of individuals’ data.

But then it goes on to shrug its shoulders and not suggest any remedial action that can be taken and says that it must just adopt a watching brief.

Certain stakeholders have identified practices which they consider bundling or tied sales, low prices, and exclusivities: the association of several intermediation services, association of intermediation services and services supplying targeting data, and association between an intermediation service and exclusive access to a site’s inventory.

The German cartel office was more aggressive back in February, saying it will lead a “sector enquiry” and that it is worried about advertising fraud, brand safety and the illegal treatment of personal data.

It also went into more detail talking about the emergence of Accelerated Mobile Pages (AMP) and how they are prioritized on the Google search engine which means Google is essentially controlling the technology for delivering and ranking adverts on phones something Facebook has thrown a similar technology at with its Instant Articles which can be viewed from within a Facebook page. AMP pages are also rendered more quickly on a Google browser, which has increasingly become the default browser.

This phony war was seen by the Bundeskartellamt as a way of disadvantaging the rest of the German advertising industry as well as a war between Facebook and Google.

The heart of the matter is, should a company which knows all your intimate search criteria be able to use that data to serve you with advertising or should a social media site which knows who all your friends are be the right company to select adverts for you. Or should all that data which is after all yours, be available to anyone (or no-one) who wants to serve you adverts.

Any positive actions which are recommended by the two competition authorities will come with teeth and could lead to an almighty dustup between Europe and the US.

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