French Competition Authority leaves uncertain the antitrust scrutiny of major players in the Online Advertising sector

The President of the French Competition Authority (FCA), Isabelle de Silva, recently provided some interesting information regarding the on-going inquiry in the online advertising sector. Launched in the spring of 2016 in accordance with FCA’s right to release opinions on its own initiative, this inquiry is said by the FCA to be just an opportunity to collect information on this industry. However, the FCA’s annual report for 2016, released on 3 July 2017, shows that the FCA’s intention may be to have a closer look at certain important players’ behaviour from a competition law standpoint.

Background

On 23 May 2016, the online advertising sector inquiry was launched, in view of the sector’s performance in Europe (€36.2bn) and complexity with respect to activities and players. The French market (third European market for online advertising with €4.2bn turnover) was regarded as “illustrative” of a bigger market.

The inquiry focuses on “display” advertising (i.e. advertising non-related to Internet search). It aims, on the one hand to assess the importance of data exploitation, algorithms and development of programmatic transaction means, and on the other hand to develop a comprehensive understanding of market players position and possibly identify competition risks related to their behaviour.

Gathering of information and uncertain aftermath

In an interview on 4 July 2017, Mrs de Silva said that probing the online advertising sector is first and foremost a matter of collecting factual information about the industry. “Lots of actors have their own views, but they don’t see how the entire industry functions (…) we feel that the sector wants to have a precise view of the industry“, she commented. In such a context, Mrs de Silva insisted that the FCA was currently conducting a sector inquiry and not an antitrust probe.

However, Mrs de Silva reckons that such inquiry may result in the FCA initiating “a more in-depth analysis” of certain practices and may trigger consequential probes out of FCA’s own initiative and possibly antitrust cases. This possibility is strengthened by FCA’s annual report for 2016, released on 3 July 2017, in which Mrs. de Silva she goes further by affirming the “opportunity to question positioning of players like Google or Facebook in the sector“.

In the context of the European Commission’s reflection on digital platforms, Mrs. de Silva indicated that a Conference on platforms and algorithms will take place in November 2017.

Launch of a public consultation

As announced in its annual report, on 11 July 2017 the FCA launched a public consultation with the view of complementing the information already gathered as a result of the inquiry.

Specifically, the FCA intends to increase its understanding of certain offerings and technologies and get more details on certain identified behaviour and conflicting statements that might have been received. The FCA expects this new questionnaire, which contains 65 questions, to provide it with the insight needed to adopt and publish a balanced final analysis.

What’s next?

The FCA announced that the public consultation will remain open until 15 September 2017 and the interested stakeholders are therefore invited to send their responses no later than this date. The final opinion in this case, consisting of a diagnosis of the sector and FCA’s recommendation to favour competition in the market, is expected in the autumn  of 2017.