The German Federal Cartel Office investigated the trade in advertising space on the Internet and found that Google held a dominant position even outside of its own search engine. An antitrust investigation is now to follow.
Google has considerable influence
According to Chairman Andreas Mundt, the German Federal Cartel Office first determined that behind the distribution of advertising outside of search engines lies a “very complex system of automated exchange of online advertising space, which is opaque enough for many”. The authority sees its objective as “shed light on this black box [in order] be able to address market power issues and associated regulation under competition law. It has already become clear to the supervisory authority that Google occupies a central position in advertising outside search engines: “Google also has a strong market position in this technical sub-sector of online advertising at almost all the stages of the value chain. Many competition problems arise, in particular for this reason.
The process behind visible online advertising includes not only the automated exchange of advertising space, but also the automated delivery and performance measurement of advertisements and is strongly influenced by the various market players, continues the Bundeskartellamt. Google once again has a special role to play here among the particularly important players in the market: “Google is represented at almost all stages of the value chain and in practically all relevant departments, and in most cases it has a very strong position in the market.”
New options in competition law
Since 2021, the German Federal Cartel Office has new options under competition law that allow it to intervene much earlier than before on certain behaviors of large digital groups. Mundt mentioned these new market regulation instruments when publishing a report on the situation of online advertising. Google was already at the center of the supervisory authority’s attention when the new supervisory instruments were introduced. Market participants as well as interested parties now have until October 28 to comment on the discussion report.
Google rejects criticism
Google has already dismissed criticism of its own positioning in the market. A company spokesperson said Google’s involvement in the relevant market is, on the one hand, “to help businesses of all sizes [to] effectively reach their customers” and, on the other hand, that it faced significant competition. He added that the Bundeskartellamt report only covers a small subset of the market, not the entire advertising market, where advertising space can be purchased on hundreds of platforms and from many established players. The spokesperson further announced a careful examination of the report and cooperation with the Federal Cartel Office.