France imposes 300 billion KRW fine on Google for 'abuse of advertising market dominance'... Targeting Big Tech

Abuse of Dominance in Online Advertising Market
Changes in Google's Ad Brokerage Practices Inevitable
European Regulators Accelerate Pressure on Big Tech Firms

[Image source=Yonhap News]

[Asia Economy Reporter Kim Suhwan] France has imposed a fine of 220 million euros (approximately 297.5 billion KRW) on Google, which was sued for abusing its market dominance in the online advertising market. Regulatory authorities targeting U.S. big tech companies, whose main revenue source is advertising, for abuse of market position in the advertising sector could potentially impact the overall advertising business of these companies.

According to a report by The Wall Street Journal (WSJ) on the 7th (local time), French authorities decided to impose a fine of 220 million euros on Google, stating that Google's advertising practices disadvantaged other competitors.

The authorities judged that Google's advertising management platform, 'Ad Manager,' gave excessive benefits to its own online advertising marketplace, 'Ad Exchange' (AdX), where customers sell ad space to advertisers in real time.

Specifically, Ad Manager provided strategically significant data such as winning bid prices, enabling Ad Exchange to more easily meet advertisers' requirements.

In return, Ad Exchange provided related data needed by Ad Manager more favorably than to other competing platforms, according to the authorities.

Typically, major media companies use multiple advertising platform companies simultaneously when selling advertising space on internet sites or mobile applications.

However, the authorities judged that Google's service used various methods to prevent competing advertising platform companies from mutually using the services.

Isabelle de Silva, head of the competition authority, said, "This sanction is significant as it is the world's first decision to examine the complex algorithmic auction process on which the online advertising business depends."

De Silva also emphasized, "We will recreate a fair competitive environment for all participants and enable all publishers to maximize the use of their advertising space."

In response, Google stated that it would not contest the decision by the French competition authority and would revise its practices by the first quarter of next year.

Currently, Google's advertising brokerage business accounts for about 13% of its total revenue, making it one of its core income sources.

Previously, advertising platform companies pointed out Google's conflict of interest issues, noting that Google operates advertising sales and brokerage services as well as direct advertising businesses such as YouTube.

[Image source=Reuters Yonhap News]

As regulatory authorities directly target Google's advertising sales and brokerage business, there is speculation that changes in Google's advertising business model are inevitable. WSJ reported, "This sanction is limited to France," but added, "It will provide guidelines on how Google should respond to potential allegations of abuse of market dominance in the online advertising market in other countries."

Following the French case, the possibility of Google being sued for abuse of market dominance related to its advertising brokerage business in other countries has increased, leading to analyses that Google will inevitably have to change its business practices.

Meanwhile, European authorities continue to pressure big tech companies with antitrust regulations. The European Union (EU) and the United Kingdom launched antitrust investigations last week into Facebook's online secondhand marketplace, 'Marketplace.' These authorities will examine allegations that Facebook favors its own platform over other companies selling goods.

Additionally, the EU filed antitrust charges against Amazon in November last year and against Apple in April this year.

Furthermore, on the 6th, the Group of Seven (G7), a gathering of seven major advanced countries, issued a statement after a finance ministers' meeting agreeing to set a global minimum corporate tax rate of 15% to prevent tax avoidance by multinational companies, including big tech firms.

This content was produced with the assistance of AI translation services.