EPC Chairman Christian Van Thillo said: “It is high time for the European Commission to impose measures on Google that actually change, not just challenge, its behaviour – behaviour that has caused and continues to cause considerable harm, not just to Europe’s press publishers, but to all advertisers and eventually consumers in the form of higher prices (including ad tech fees), less choice, less transparency and less innovation. Competition authorities across the world have found that Google has restricted competition in ad tech, yet Google has been able to get away with minor commitments which do nothing to bring about any meaningful changes to its conduct. This cannot go on. The stakes are too high, particularly for the future viability of funding a free and pluralistic press. We call on the Commission to take concrete steps right now that will actually break the stranglehold that Google has over us all.”
Since its acquisition of DoubleClick in 2008, Google has embarked on a barrage of unlawful tactics to foreclose competition in ad tech. This strategy paid off, and Google has achieved end-to-end control of the ad tech value chain, boasting market shares as high as 90-100% in segments of the ad tech chain. Google’s ad tech suite is rife with conflicts of interests, as Google represents the buyer and the seller in the same transaction, while also operating the auction house in the middle, and selling its own inventory. Far from managing its conflicts, Google has time and again taken advantage of its position to prioritize its own self-interests at the expense of the very customers it is supposed to serve.
The European Commission is uniquely positioned to act on the Complaint, and it can leverage the findings of a number of competition authorities, including the French competition authority, the UK Competition and Markets Authority, and the Australian Competition and Consumer Commission, as well as the findings in the US States lawsuit.
Van Thillo continued: “This Complaint presents a unique opportunity for the European Commission to rectify the problems that have arisen as a direct result of its 2008 clearance of the Google/DoubleClick merger, by imposing effective remedies that will restore competition in ad tech, for the benefit of European press publishers, marketers, and consumers.”
You can read the Executive Summary here
The EPC has instructed the law firm Geradin Partners for the preparation of the complaint
What is ad tech and why does it matter?
Ad tech refers to the technology powering online ads consumers see in their everyday lives when browsing the web – think for example of a banner ad in the homepage of a newspaper promoting the latest blockbuster movie. As news consumption has shifted from print to digital, press publishers have grown increasingly reliant on online advertising to fund their operations. While ad space was traditionally sold on the basis of bilateral negotiations between press publishers and advertisers, online advertising is being increasingly sold “programmatically” on the basis of complex real-time auctions happening in the milliseconds it takes to load a webpage. Ad tech vendors organize these real-time auctions, along with providing software tools to press publishers and advertisers to manage their ad space and campaigns respectively. The ad tech value chain refers to the various ad tech vendors capturing the space between press publishers and advertisers, including publisher ad servers, ad exchanges, and ad buying tools.
The problem is that Google has come to monopolize the ad tech value chain, charging a very high commission of at least 30% on transactions it intermediates between publishers and advertisers. At the same time, Google has actively suppressed competition from rival providers, denying press publishers and marketers of the benefits of competition. Google has developed unmanageable conflicts of interests, and time and again has prioritized its own interests at the expense of its clients, introducing features that depress press publisher revenue and increase its own.
What is at stake for European press publishers and consumers?
Absence of effective competition in ad tech causes considerable harm to press publishers, advertisers, and European consumers in the form of supra-competitive fees, lower quality of service, and less innovation. Less advertising revenue means press publishers have less resources to invest in news content and fulfil their socially important mission of informing the general public and holding those in power accountable. Supra-competitive ad tech fees are also borne by advertisers, which they may pass on to consumers in the form of higher prices for advertised goods or services. Everyone loses but for one company: Google.
The European Publishers Council (EPC) is a high-level group of Chairmen and CEOs of Europe’s leading media groups representing companies which are active in news media, television, radio, digital market places, journals, eLearning, databases and books.
We have been communicating with Europe’s legislators since 1991 on issues that affect the health and viability of journalistically-driven media and publishing companies in the European Union which uphold the freedom of expression, media diversity, and democratic debate.