Business

French competition watchdog aims probe at 'overwhelming' ad power of Google and Facebook

We'll take a very long lunch then decide what to do

By Andrew Orlowski

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France's national competition regulator has decided that Google and Facebook hold "overwhelming" market power in digital advertising and are considering a formal investigation.

A preliminary probe by the Autorité de la Concurrence, which lasted two years, quizzed over 100 participants in the digital ad market, discovering that "many even wanted to remain anonymous", according to Deputy General Rapporteur Nicolas Deffieux.

The authority found that publishers only pocket 40 per cent of the spending on advertising, a significant cut for the middle man, or middlemen. Other issues of concern were the barriers to entry posed by the twosome's data aggregation – a point raised by Oracle in its complaint to the European Commission – "tied selling strategies", and discriminatory practices. Any of the three may be cause for a formal investigation, French newspaper Le Figaro has reported.

Digital advertising now comprises around a third of the entire advertising market, and between them 84 per cent of the digital spending outside China will flow through Google and Facebook, according to ads giant GroupM. Not only is digital growing at the expense of older media, but the new cash is almost entirely going to the Silicon Valley duo.

Pivotal analyst Brian Weiser estimated that the duopoly hoovered up to 99 per cent of new digital ad spending in 2016, and although other analysts disagree, it's not by much. ®

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