The digital world’s king of the hill has decided it will alter its global advertising business to keep from abusing its dominance.
In a landmark deal struck with French authorities, Google has finally moved its position after facing pressure from regulators over antitrust concerns. The agreement the company made with a French competition watchdog, which includes a settlement of 220 million euros ($268.2 million), is designed to reset the advertising playing field and give publishers a more advantageous position.
“The decision to sanction Google is of particular significance because it’s the first decision in the world focusing on the complex algorithmic auction processes on which the online ad business relies,” said Isabelle de Silva, President of the French Competition Authority.
Where Google went wrong
Google drew the ire of French regulators because its Ad Manager platform provided its ad exchange network, Google AdX, with inside information on bidding prices for ads. That essentially handed Google all the data it needed to remain competitive.
The French authority said AdX also gained privileged access to requests made by advertisers via Google’s ad services. That access created concerns that Google would have too much control over online advertising when it bought AdX.
What changes will we see?
The primary change Google has agreed to make will give publishers a more advantageous position. Going forward, the company agreed to upgrade the way its Ad Manager services worked with competitors.
However, consumers, advertisers, and publishers won’t see these changes overnight. Even though Google won’t be appealing the legal decision, it has until the first quarter of 2022 before it needs to have some of the pieces of the agreement in place.
French finance minister Bruno Le Maire welcomed the move, saying “these are serious practices and they have been rightly sanctioned.”
Will other dominoes fall?
News of Google’s acquiescence might be today’s biggest watercooler topic in Silicon Valley. Executives at Apple and Facebook might be giving a second thought to being defiant over their own antitrust allegations.
Just last week, Facebook was hit with two new investigations in the U.K. and Europe, with regulators planning to take a closer look at whether Facebook Marketplace and Facebook Dating have an unfair advantage over competitors.