French competition authority says Google online search adverts "dominant"


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Following the European Commission's announcement on 30 November to open an antitrust investigation into allegations that Google has abused a dominant position in online search in Europe, the French competition authority has stated that Google holds a dominant position in the online advertising market linked to search engines.

The French regulator 'Autorité de la Concurrence' released an opinion on 14 December, finding that Google holds a dominant position in the French online advertising market but that sanctions should not be imposed - for now. Rather, Google would only face sanctions if it abused this power.

This answers a request put forward by the French Government in February 2010 to examine the online advertising sector, following critics and worries about Google supremacy raised, inter alia, by concurrent search engines, advertisers and the press online. All complaints against Google are listed in a table.

Advertisers complained that Google's practices regarding AdSense were opaque and arbitrary. AdSense is a service that allows advertisers to buy keywords which may trigger commercial links alongside the search results when entered as a search query.

A spokesman for Google commented on the opinion: "Search ads are one of many options for advertisers, if the price of search ads rises, advertisers can and do switch to other formats, both online and off line. That's the sign of a competitive and dynamic industry."

But the authority points out that Google's AdSense service, arguably one of Google's most important sources of income, represents a "specific market that cannot be replaced by other forms of communication".

It further notes that sanctions could be imposed if Google misused its position by e.g. delaying or eliminating competition by putting up technical obstacles or by artificially increasing barriers to entry. Google will also be sued if it refuses to apply minimum transparency standards in contractual relations with clients or sets up exorbitant conditions.

Next steps: The French watchdog's conclusions will feed into the pan-European antitrust investigation launched by the European Commission in November. WFA has made clear its opinion on Google's AdWords service, stating that their policy could significantly raise the cost for brand owners to effectively protect and promote their brands online.

For more information on current developments please contact Malte Lohan

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