On 14 December 2010, following a request by the French Minister for Economy Finance and Employment to investigate the online advertising sector, the French Competition Authority (the 'Authority') issued an opinion stating that it considers Google holds a dominant position on the online advertising market linked to search engines.
Given the central position of online search engines, various operators have expressed a number of concerns against Google; some of them alleging that Google undertook unfair or illegal practices. These allegations include:
- competing search engines alleging that Google's power results from its attempts to close off markets;
- advertisers or Internet site editors complaining about Google's arbitrary and opaque practices; and
- the press, which is a customer, partner, competitor and potential supplier of Google, considering that it has been the subject of free riding and predatory pricing.
The Authority considers that Google holds a dominant position on the specific market for search-related online advertising which it believes forms a relevant market in itself and is not substitutable with any other forms of communication. The Authority however stresses that dominance is not an issue in itself and that it is only the abuse of market power that could be condemned under Competition Law. It further notes that Google's dominant position results from a great deal of innovation, supported by significant and continuous investments.
As part of its analysis of the search-related online advertising market, the Authority sets out several types of conduct that may infringe competition law. These include (i) possible exclusionary conduct intended to discourage, delay or eliminate competitors and (ii) possible exploitative abuses whereby search engines would impose exorbitant conditions on its partners or customers. The Authority stresses however that it is providing its opinion on a consultative basis only and that it is not taking any position on the legality of any such practices as this would require further investigation.
The Authority further recommends that the legal obligations of transparency of the press sector should be applied to online advertising operators.
In the event that Google's actions require to be sanctioned, the Authority concludes that Competition Law could be relied upon without it being necessary to implement a sector-wide regulation.
To view Community Week, Issue 502 – 17 December 2010 in full, click here.
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