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Explainer: France forces Google to change its ad business model – Times of India




NEW DELHI: Prompted by 268 million reasons — or let’s say, a fine of $268 million that Google agreed to pay France — the global search engine company capitulated and agreed to make changes to global advertising business and not abuse its dominance.
You mean, it’s huge?
No kidding. The French Competition Authority, which conducted an investigation after complaints by US-based News Corp, French news publishing group Le Figaro and Belgian press group Rossel, concluded that the search engines’s ad management platform, Google Ad Manager, was biased in favour of Google at the cost of its competitors on advertising servers.
And if you want to talk figures, how about this — last year, Google generated $147 billion revenue from its ad business. That’s more than 80% of the total revenue generated by Alphabet, Google’s holding company. While that would make the fine appear like chump change, it stings more because of Google agreeing to change its business model.
What’s more, Google, which will implement some of the changes by the Q1 of 2022, has agreed not to appeal the decision.
Explain some more please
Due to an inherent algorithmic bias, Google’s ad management platform for large publishers, Google Ad Manager, favoured its online ad marketplace, Google AdX where publishers sell space to advertisers in real time.
While the platform shared with AdX data like winning bid prices, the latter, which had access to advertisers’ requests through its ad services, shared its data in a much more smoother fashion with Ad Manager than it did with ad management platforms — as a result of which Google’s rivals and publishers suffered.
The significance
In the words of France’s antitrust chief Isabelle de Silva, “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”.
Not to mention that it will definitely embolden competition watchdogs in other countries, besides tilting the balance of power in advertising in favour of publishers.